Amazon stock plunges 9% as 2026 capex guidance blows past expectations
Beyond headcount growth
New markets and a broadening service offering provide growth opportunities for Utilitywise (L:UTW) in the medium term. Increases in consultant headcount will underpin further rises in profitability in the short term. The pursuit of new business rather than contract extensions should lead to a gradual improvement in cash flow. Our valuation analysis indicates potential upside on a short- and long-term view.
We expect improving cash generation
The FY15 results demonstrated continued growth compared to FY14’s restated figures (to correct the provision for consumption variance from assumptions). Revenue grew by 41% to £69.1m, gross profit increased 35% to £30.3m and EBITDA rose by 23% to £17.8m. Following the publication of the FY15 results, we have revised our FY16 forecasts and published estimates for FY17 for the first time. Although projections for FY16 now envisage slower growth, we still expect to see EBITDA rise by 17% in FY16 and 15% in FY17 and EPS (normalised fully diluted) growth of 10% and 15% respectively. We also expect indebtedness to fall as an anticipated decline in the relative importance of extension business benefits cash flow. We forecast CAGR of 18% (2015-17) in the DPS.
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