0R15 8884.0068 1.4156% 0R1E 9171.0 0.4381% 0M69 None None% 0R2V 254.3746 5.7691% 0QYR 1619.0 1.9521% 0QYP 436.689 -0.8652% 0RUK None None% 0RYA 1604.02 0.4396% 0RIH 190.8 0.0% 0RIH 198.5 4.0356% 0R1O 225.0 9877.8271% 0R1O None None% 0QFP None None% 0M2Z 255.4879 -0.0829% 0VSO 33.09 -7.0636% 0R1I None None% 0QZI 599.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 225.74 -0.2871%
Quartix Technologies PLC (LON: QTX) – Shift from low-margin Insurance business to the core software & telematics products.
Quartix Technologies PLC (LON: QTX) is an FTSE AIM All-Share listed Company that is the leading supplier of subscription-based vehicle tracking systems, software, and services. Moreover, the Company facilitates fleet customers & insurers to enhance productivity and reduce cost by capturing, analysing, and reporting vehicle & driver data. QTX has installed more than 600,000 systems since 2001.
(Source: Company presentation)
Recent Trend of Dividend payments: The Company will pay an interim dividend of 1.5 pence per share on 10 September 2021, with an ex-dividend date of 12 August 2021. Moreover, it had paid an FY20 final dividend of 17.7 pence per share on 30 April 2021.
Growth Prospects
Key Risks
Now, we will analyse the Key Fundamental Statistics & Shareholding Pattern of Quartix Technologies PLC.
Walters (Andrew John) is the most significant shareholder as it holds nearly 10.66 million shares as of 30 June 2021.
H1 FY21 Financial & Operational Highlights (for the six months ended 30 June 2021, as of 28 July 2021)
(Source: Company result)
Share Price Performance Analysis
(Source: Refinitiv; Analysis done by Kalkine Group)
On 05 August 2021, at 10:49 AM GMT, QTX’s shares were trading at GBX 497.50, up by around 0.51% from the previous day closing price. Stock 52-week High and Low were GBX 580.00 and GBX 310.00, respectively.
From a technical perspective, QTX is trading above 20-days exponential moving average of GBX 484.50, indicating a upside potential in the stock price.
Over the last one year, QTX’s stock price has delivered a positive return of ~44.74%, and it has outperformed the FTSE AIM All-Share index (benchmark index) with a return of about 38.16% and FTSE All-Share Software & Computer Services index (benchmark sector) with a return of about 9.69%.
Valuation Methodology: Price/Earnings Approach (NTM) (Illustrative)
Business Outlook Scenario
QTX had delivered decent H1 FY21 results with strong growth witnessed in the fleet customers. The Company had set strategic priority with an increased focus on fleet telematics operations. Moreover, the Company had estimated insurance revenue to represent just 4% of the total revenue in 2022 due to the continued shift from low margin business to telematics market. Meanwhile, QTX had carried the positive momentum in H2 FY21 as well. The Company aims to generate high levels of recurring revenue and identify growth opportunities for the fleet operations in the UK, USA, France, and the rest of Europe. Overall, the Company would utilize the financial strength to achieve robust business growth for the core fleet operations.
Considering the decent H1 FY21 financial performance, better leverage position as compared to the industry, increased contribution of recurring revenue, robust new fleet subscription growth, consistent dividend payments, and support from the valuation as done using the above method, we have given a “Speculative Buy” recommendation on Quartix Technologies PLC at the current price of GBX 497.50 (as on 05 August 2021 at 10:49 AM GMT), with lower-double digit upside potential based on 75.46x Price/NTM Earnings (approx.) on FY21E earnings per share (approx.).
*The reference data in this report has been partly sourced from REFINITIV.
*All forecasted figures and Peer information have been taken from REFINITIV.
*Dividend Yield may vary as per the stock price movement.
*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.
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