accesso Technology Group (ACSO)

accesso Technology Group PLC is a British company which provides technology solutions to the leisure, entertainment and cultural markets, serving over 1000 clients worldwide. The company is based in Twyford, the United Kingdom and generates revenue by providing ticketing, mobile, eCommerce technologies and virtual queuing solutions. The company differentiates its operations in five operating segments: UK, Other Europe, Australia/South Pacific, USA and Canada, and Central and South America.

Recent Development
On 7^th February 2019, the company announced that Tom Burnet, effective 1^st March 2019, would be moved to a Non-Executive Director role. Bill Russell was appointed as the Group's new Non-Executive Chairman.

Financial Highlights (FY 2018, $m)

(Source: Company Filings)

The company’s revenue for the year grew by 15.5 per cent to $118.7 million, from $102.8 million in 2017, the growth was driven by a healthy increase of 18.3 per cent within ticketing and distribution, which rose due to a strong performance from existing venues coupled with the introduction of additional venues. While adjusted operating profit grew to $25.1 million from $20.0 million in 2017, representing a growth of 25.5 per cent, operating profit for 2018 was $6.3 million, down from a reported $10.1 million in 2017, due to write-downs during the year. Adjusted operating margin rose to 21.1 per cent for 2018, against 19.5 per cent in 2017. Adjusted EBITDA was reported at $34.8 million, representing 36.5 per cent growth on proforma basis as compared to the last year data. Cash generated from operations declined to $17.8 million from $33.1 million in 2017. The Board has not announced any dividend.

Valuation Methodology


Share Price Commentary

Daily Chart as at Mar-28-19, before the market close (Source: Thomson Reuters) 

On 28th March 2019, at the time of writing (before market close, GMT 9:45 am), ACSO shares were trading at GBX 820.00, up by 1.23 per cent against its previous day closing price. Stock's 52 weeks High and Low is GBX 3,000.00/GBX 655.00. The outstanding market capitalisation was around £221.35 million.

Conclusion
Ticketing and Distribution, which accounts for the majority of the group revenue, is forecasted to report a strong growth and will be in line with the mid-teen’s percentage growth achieved in 2018. Though the stock has declined substantially in the past few months, predominantly due to circumstances outside the control of the group, the business of the group looks table, supported by acquisitions undertaken by it. Based on the strong growth prospects, and supported by valuation done using the above method, we have given a BUY recommendation at the closing price of GBX 810 (as on 27th March 2019) with lower double-digit upside potential based on 16.1x NTM Price/Earnings Value (approx.) on FY19E earnings per share.
 

BATM Advanced Communications Ltd (BVC)

 
BATM Advanced Communications Ltd is an Israel-based technology company, engaged in providing real-time technologies, which are backed by strong intellectual property and patents. The company was established in 1992 and develops, produces and markets medical products, as well as data communication products. Its two operating segments are Bio-Medical and Networking and Cyber.

Recent Development
On 5th March 2019, the company announced that it won its first international customer for agri-waste treatment solution. The company was awarded the contract by a Philippines-based company and is worth approximately $1.5m.

Key Financial Highlights (FY 2018, $m)
Supported by strong growth in both the divisions, total revenue for 2018 increased by 11.6 per cent to $119.6 million, driven by growth in the ICT services & solutions business and distribution business. Gross margin declined to 28.8 per cent from 30.6 per cent in 2017 due to a decrease in the gross margin of the Networking and Cyber division. While the adjusted operating profit declined to $2.6 million from $5.6 million reported in 2017. On an underlying basis, the company reported a substantial rise in adjusted operating profit to $2.6 million compared with $0.1 million in 2017, driven by operating profit generated by the Networking and Cyber division. Earnings per share rose by 50 per cent to 0.09¢.

Valuation


Share Price Commentary

Daily Chart as at Mar-28-19, before the market close (Source: Thomson Reuters) 

On 28th March 2019, at the time of writing (before the market close, GMT 11:00 am), BVC shares were trading at GBX 48.56, remaining flat against its previous day closing price. Stock's 52 weeks High and Low is GBX 52.60/GBX 26.00. The outstanding market capitalisation was around £197.08 million.

Conclusion
Both the segments of the company are experiencing significant interest in soon-to-be-launched products as well as rising demand for its newly-launched products and solutions. The order book is also higher in comparison to last year. The company expects to achieve revenue growth more than the market expectations. However, the company's operations face some key risks, especially diversified business, which is focused at emerging markets, are subject to a higher political, legislative, and economic uncertainty. Any decrease in demand, which are less easy to predict in developing countries, may adversely affect the financials. The company is also subject to development risk inherent in the business activities pursued by the group. Additionally, the shares are trading near its 52-week high, suggesting limited potential for the upside. Keeping in mind these factors, we recommend investors should keep a close watch on the stock going forward.

 

GB Group (GBG)

GB Group PLC is a Chester, United Kingdom-headquartered company, specialising in identity data intelligence. The company engages in validating and verifying the identity and location of customers to help organisations make decisions about the customers they serve and the people they employ. The company serves its clients with the assistance of products which are built upon data obtained from over 200 global partners across 79 countries. The company's operations are differentiated in two segments: Fraud, Risk & Compliance and Customer & Location Intelligence.

Recent Development
On 11th February 2019, the company announced that it had agreed to acquire IDology for an enterprise value of $300 million. IDology is a US-based private company which provides fraud detection and identity verification services, and its acquisition will help the group to meet the growing customer appetite for an identity verification provider with global capabilities.

Key Financial Metrics (Half Year results ended 30^th September 2018, £m)

(Source: Company Filings)

On a reported basis, the company's revenue grew by 9 per cent to £57.3 million in the first half of FY 2019, while organic revenue growth was 11 per cent. Adjusted operating profit was £8.8 million, reporting a decline of 16 per cent, while, on an underlying basis, operating profit rose by 8 per cent. Profits after tax were £2.0 million (2017: £2.4 million). Cash balance at the end of the period was £27.5 million, against £17.9 million at the end of the first half in FY 2018, while net cash balances were £18.6 million (2017: £4.1 million).

Valuation Methodology


Share Price Commentary

Daily Chart as at Mar-28-19, before the market close (Source: Thomson Reuters) 

On 28th March 2019, at the time of writing (before market close, GMT 12:15 pm), GBG shares were trading at GBX 475.5, down by 0.8 per cent against previous day closing price. Stock's 52 weeks High and Low is GBX 636.00/GBX 390.50. The outstanding market capitalisation was around £922.22 million.

Conclusion
In the reported period, the company made good progress and is looking for further growth both organically and through strategic acquisitions. Going forward, due to several big customers wins, the company expects positive momentum and expects to meet full-year expectations for both revenue and profit growth. However, the company operates in a competitive market, which may lead to pressures on pricing. New regulations, like GDPR, constraints the company's ability to collect new data. Therefore, we recommend investors to keep a watch on the stock going forward.
 
*All forecasted figures and Peer information have been taken from Thomson Reuters.

*The buy recommendation is valid for the current price as covered in the report (as on Mar-28-19).

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.
The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.
Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser. Our publications are NOT a solicitation or recommendation to buy, sell or hold.