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Broker lifts StatPro Group target on upbeat trading update

Published: 11:52 25 Jan 2017 GMT

stockbroker
The stockbroker is upbeat

Broker N+1 Singer has upgraded its target price for StatPro Group PLC (LON:SOG) following a positive trading update on Wednesday.

StatPro’s trading has vindicated its early investment in cloud technology.

Nowhere is this point more evident than in the sales of StatPro Revolution, its cloud-based portfolio analysis product, which generated recurring revenues of £15mln last year, up 68%.

From a standing start, Revolution now makes up just under 40% of the group's total turnover, which rose 18% in the 12 months to December 31.

Also of note was the resilience of StatPro Seven, where the underlying cancellation rate was just 2%. The order book currently stands at £46mln (up 9%).

In a trading update, the supplier of analysis and pricing software to the asset management industry said revenues and profitability were in line with expectations.

StatPro chief executive Justin Wheatley said: “This success is undoubtedly due to our early investment in cloud technology, over eight years ago. The complexity and scale of the technology we have developed will be difficult to imitate.

Singer in a note described it as a positive trading update and highlighted that profits are in line with expectations.

The broker sees StatPro as a ‘buy’ and sets a new price target of 163p, up from 158p, which represents some 64% upside to the current price of 99.6p.

In this morning’s statement, the company also revealed net debt was just over £10mln on December 31, while StatPro said it would incur a non-cash impairment charge of around the same figure against goodwill.   

This is associated with the Canadian business, FRI, acquired in October 2006. Singer described the charge as no cause for concern.

“We increase our FY 2017 revenue estimate by 2% to reflect the beneficial impact of weaker sterling but make no changes to our earnings numbers to allow headroom for increased investment,” it said.

“We continue to look for further significant Revolution orders as evidence that this year will provide a springboard for accelerating growth.”

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