Equities analysts at Peel Hunt have reiterated a buy rating with a target price of 25p following Inspired’s trading update on Tuesday September 6.
Inspired’s Energy Assurance division – which operates as an energy marketplace between suppliers and businesses – was “slightly ahead” of Peel Hunt’s expectations after delivering 3% organic revenue growth.
Meanwhile the Optimisation consultancy division “enjoyed a record performance as clients prioritise energy-efficiency projects that are now delivering a quicker cash payback”.
The Software Solutions segment “continues to demonstrate a highly resilient performance through long term relationships and attractive EBITDA margin dynamics,” while the rapidly expanding ESG segment came in ahead of expectations.
Peel Hunt retains a full-year EBITDA target of £21.2mln, giving an unchanged earnings-per-share (EPS) target of 1.3p.
Net debt is expected to go down given strong underlying cash generation which rose to £5.8mln in the first half (though was offset by a £10.2mln contingent payment).
“Overall, we expect leverage to remain comfortably below 2xEBITDA, supported by inherent cash generation," said analyst Andrew Nussey, adding: “The outlook remains positive and we reiterate our buy recommendation.”
AIM-quoted INSE shares were up 3.5% on the day as of September 6, 13:15 BST.