Prodware (PA:ALPRO) is making progress with its strategy to refocus the company on profitable business lines and cloud-based solutions. This is reducing revenues in the short term but should ultimately result in higher recurring revenues and more sustainable profitability. We have revised our forecasts to reflect current trading and the transition to subscription-based revenues. On our reduced forecasts, Prodware continues to trade at a discount to peers; growth in recurring revenues combined with margin expansion should start to narrow this discount.
H116 results show weaker demand and restructuring
Prodware reported H116 revenues 7.2% lower than a year ago (5.3% in constant currency), reflecting the disposal of a business, weaker bookings in France and the transition to SaaS-based business. Lower staff costs helped maintain the EBITDA margin, although higher amortisation resulted in a 29% decline in EBIT y-o-y. The Q3 revenue update confirms that while 9M16 revenues declined 7.3% y-o-y, SaaS-based revenues continue to show strong growth.
To read the entire report Please click on the pdf File Below