Activity remains brisk at SNP Schneider (DE:SHFG), with utilisation rates very high, as the company continues to benefit from favourable structural growth drivers, the partnership with SAP, along with its elevated profile in wake of the landmark Hewlett Packard Enterprise Co (NYSE:HPE) deal of 2015. SNP has been winning new business with household names in the US including Kellogg's (NYSE:K). The outlook is supported by the group’s broadening global infrastructure following recent acquisitions, along with two training schemes in the US and Germany which represent an important part of the next growth phase. Given the buoyant backdrop, we continue to believe the shares look attractive trading on c 18x our edged-up FY17 earnings.
Final results: Investing for growth
FY15 numbers were broadly in line with the provisional results, announced in late January. Revenues jumped 84.5% to €56.2m, including €8.8m from RSP, acquired in early 2015, and 56% organic growth. The operating margin dipped in Q4, largely due to the establishment of a training programme in the US, which, along with costs associated with the recent acquisitions, are expected to hold down the near-term operating margin by 300-400bp. Nevertheless, we still expect margins to trend higher over the medium term. The training programmes in the US and Germany are each expected to produce around 40 new fully trained IT consultants in 2016, which is expected to lift total headcount from c 600 now towards 700 at the end of the year. The dividend was lifted by more than we had expected to 34c. The business themes differ markedly in North America and Europe – SNP is helping its US customers shift their IT systems to the cloud while in Europe, customers are primarily focused on switching their ERP systems to S/4HANA.
To read the entire report Please click on the pdf File Below