Qurius frustrations
Q4 revenue figures showed a slow end to 2014, with contract deferrals and 24 February 2015 trading and operational issues in Belgium and Germany, but still ahead of our Q4 expectation. However, it is not clear at present just how significant the impact on profits for 2014 will be. We do not believe it will be anywhere near large enough to negate the considerable earnings multiple discounts at which Prodware trades compared to some of its peers.
Prodware (PARIS:ALPRO) released its Q4 revenues figures on 12 February and provided some limited detail on its profitability in the last months of the year. Q4 revenues were €49.4m, giving a full year figure of €174.4m – marginally ahead of our forecast of €172.9m. Prodware saw some deferral of orders into 2015 and a decline in sales in the former Qurius operations in Benelux and Germany, where Prodware had taken the decision to focus on more profitable, larger enterprise customers. As a result, it is anticipated that, together with greater than expected restructuring costs in these areas, Prodware’s profits for FY14 will not match analysts’ estimates, although at present it is not yet clear by how much. We believe 2015 should see Benelux and Germany move to break-even and that positive contributions to group profits will follow soon afterwards.
In the absence of further clarity on numbers we have left our estimates intact, but look forward to the full annual results on 18 March and to more detail on the progress Prodware is making in increasing its software revenues (particularly SaaS) and on the growth in Spain, the UK and Israel. These frustrations aside, Prodware continues to trade at considerable discount to peers.
To Read the Entire Report Please Click on the pdf File Below