JDC Group AG (DE:A8AG) continued to improve its financial results in H118 (commission income was up 10% y-o-y), building on its strong market presence and ongoing digitalisation programme. The results put JDC on track to reach break-even at the net income level in FY18 (in line with current Bloomberg consensus). Further investments in new technologies (eg B-LAB) along with potential M&A activity should help strengthen its position as one of the market leaders. JDC’s shares currently trade on a FY18 consensus P/E of c 56x, a premium of >100% to the peer group, although this premium diminishes over subsequent years.
H118 results: JDC regained momentum
JDC reduced its net loss to €0.2m in H118 vs €0.6m in H117. This was in part due to an increase in commission income (up 10% y-o-y to €44.5m in H118) that allowed the company to realise a positive operating leverage effect and improve EBITDA by 17.6% y-o-y to €2.0m. The company achieved c 44% and 34% of its FY18 revenue (€100m) and EBITDA (€6m) guidance, respectively. Importantly, management expects the contribution from the Albatros agreement to be at least twice as high in H218 as in H118 (and overall sales of €20m in FY18).
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