Crealogix (SIX:CLXN) saw strong momentum in H117 on the back of the group’s internationalisation strategy, supported by favourable digital banking industry dynamics. The numbers were boosted by several large deals that were booked earlier than anticipated and hence management anticipates slower license sales in H2. While customers’ decision-making in the UK remains frozen following the Brexit vote, management continues to see the UK as one of the most attractive markets. The recent expansion in Germany is working out well, as demand remains strong. Given the strength of the H1 numbers, we have moved up our FY17 EBITDA forecasts from CHF4.0m to CHF6.0m. Given the attractive growth drivers and strong balance sheet, we believe the shares are attractive on 17x our FY19e EPS.
H1 results: EBITDA beats comfortably
Group H117 revenue jumped 28% to CHF35.8m as EBITDA surged by CHF4.0m to CHF4.1m. New licence sales rose by 24%, while recurring revenues (support & maintenance plus hosting & SaaS) lifted by 53%. International sales represented 50% of the total, up from 45% in FY16. Operating cash flow rose by CHF2.7m to CHF2.0m and the net cash position improved by CHF1.8m over the six months to CHF5.2m. Additionally, the deferred payment for MBA, which is expected to be paid in FY18, fell below CHF1m to reflect the challenging UK market, and hence the adjusted net cash position rose by CHF3.2m to CHF4.2m. Following the recent share price gain, the outstanding CHF25m convertible bond is well in the money.
To read the entire report Please click on the pdf File Below