PCI Pal (PCIP) : Corp

FY 2019 is an excellent first full year for new platform

Key data

  • Share price (p) 26.5
  • Target price (p) 50.0
  • Market cap (£m) 11.3
  • Enterprise value (£m) 9.8

This is the first full year of the new AWS platform and sales progress has been excellent. Through its growing channels, PCIP has signed new contracts worldwide (notably in N. America) with a Total Contract Value (TCV) of £5.7m, up 223% on FY 2018. Moreover, the recurring Annual Contract Value (ACV) has quadrupled to £1.9m (2018: £0.5m) an extremely impressive performance that highlights the demand in the market, the quality of the channel partners and the ease of the AWS sale and global deployment. IFRS15 adoption will see the revenue booking spread over multiple periods, but the higher margins have delivered losses lower than expected at this early stage. The funding concerns have been addressed by a new £2.8m facility to be drawn as required.

Lorne Daniel 020 7220 0545 ldaniel@finncap.com

Redcentric (RCN) : Corp

Interim trading update – in line

Key data

  • Share price (p) 86.0
  • Target price (p) 120.0
  • Market cap (£m) 128.3
  • Enterprise value (£m) 145.9

Redcentric has reported an interim trading update to September in line with unchanged full-year expectations. The focus on driving growth from new and existing customers, and across both the public and private sectors, continues to deliver a base of customers with building levels of recurring revenue with net full-year benefit fully flowing through in FY21. Net debt of £16.5m was strong even after dividend payments, and a front-end loading of unchanged £5.5m full-year capex forecasts to accommodate growth. FY20 forecast net debt of £9.5mE (before share buybacks) is unchanged, which at 0.5x EBITDA demonstrates a healthy balance sheet and the opportunity, as we’ve said before, of being cast as both predator and prey in an ever-consolidating managed services environment. Target 120p reiterated.

Andrew Darley 020 7220 0547 adarley@finncap.com

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