Q3 organic revenue growth was c 80%
Activity at SNP Schneider (DE:SHFG) remains extremely busy with Q3 organic growth of around 80%, which was even higher than the 68% achieved in Q2. However, we expect this will be the peak growth rate in this cycle as the comparatives become more challenging. Nevertheless, demand remains very strong and utilisation rates remain exceptionally high, supported by an order backlog up 92% at €20.0m. We have adjusted our forecasts and our earnings forecasts move up modestly in FY16 and FY17. Hence, the shares continue to look attractive on c 14x our FY17e earnings.
Investment case: Huge transformation opportunities
SNP’s T-B is the only off-the-shelf software solution that automates the process of combining, upgrading, or carving out data from ERP systems. The global ERP market was valued at $25.4bn in 2013 (Gartner), and is growing in the mid-to-high single digits, which provides a huge opportunity for IT landscape transformations. Further, M&A activity is clearly an important driver in ERP transformation and global M&A activity has been buoyant, with $2.87tn of deals in 9M15 (Mergermarket), though M&A deal numbers in October were subdued after the recent strong activity.
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