JDC Group AG (DE:A8AG) has been successful in implementing its fintech strategy so far and continues to acquire new insurance portfolios, as illustrated by the recent deals with Albatros and Artus Gruppe. This is confirmed by JDC’s preliminary FY17 numbers, with revenues and adjusted EBITDA improving by 7.6% and 62.5% y-o-y, respectively. However, even adjusted for one-off items, FY17 EBITDA was below management target (€3.9m vs €5-6m), while revenues (€84.5m) missed guidance (€85-95m) by a small margin. Despite a weaker Q417, management remains confident in strong growth in 2018 driven by new business acquired in 2017. JDC’s shares are trading at a 2018 P/E ratio of 55.3x, c 192% ahead of the peer group.
Q417 weak due to one-offs and market uncertainty
JDC’s preliminary Q417 EBITDA stood at €0.9m, representing a 55% y-o-y decline and was impacted by €0.7m of non-recurring expenses related to the implementation of the MiFID II and IDD directives, as well as costs associated with key account projects. Adjusted EBITDA was down 5.9% in Q417, while total commission income increased by a modest 4.2% y-o-y to €24.6m amid lower than usual business activity ahead of the introduction of the new directives and German national election.
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