While Q1 revenue grew by 46%, the underlying growth was affected by customers deferring projects, particularly around SAP S/4HANA. However, new orders were healthy, and the book-to-bill ratio jumped to 1.3x. This included part of a $4.5m new contract in the US and we expect FY18 to follow a similar path to FY17 with a stronger than normal H2. Meanwhile, SNP Schneider (DE:SHFG) remains focused on bedding down acquisitions and the management team has been restructured to reflect the global nature of the business. Also, there has been some streamlining. The outlook remains favourable, particularly on the M&A-driven side of the business, with global M&A at record highs. Given the favourable industry drivers and the potential for margin recovery, the shares look attractive on c 22x our FY19e earnings.
Q1 results: Book-to-bill ratio rises to 1.30x
Group revenue grew by 46% to €31.6m, including organic growth of 2% and the impact of four acquisitions. There was also a c €450k FX tailwind. SNP reported an operating loss of €2.6m, which was after €1m of exceptional costs that are not expected to continue. Net debt increased by €5.8m to €32.6m.
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