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On the button FinnCap wise, and set to meet it appears FinnCap raised revenue forecast. It does meet their original prior to Deeplake acquisition, expecting £0.2mil form that. Meeting market expectations with EBITDA. As I had hoped and anticipated, with FinnCap now forecasting calendar year 2019 as 'a year to excel'.
They continue to pay down debt, whilst at the same time having made a promise on a progressive dividend, which paints a very healthy trading position having been reached.
finncap
Positive trading update
Castleton has released a full-year trading update confirming performance in line
with unchanged forecasts: EBITDA of not less than £6.3m (vs £6.3mE) is
expected from revenue from not less than £26.3m (£26.5m), with operating cash
conversion (of EBITDA) of 95% (95%E). The group’s strategic opportunities for
growth are supported by this continued proof of strong cash generation –
forecast to reduce net debt to negligible levels of close to net cash by March
2020. After a busy and constructive year including the acquisition of Deeplake (a
digital communications platform) and acquisition and consequent insourcing of
its outsourced offshore R&D operations, we look forward to prelims in June for
more detail on the clearly effective growth drivers. Target 125p reiterated.
?Castleton has delivered on a further series of proof points during the year,
delivering growth in recurring revenue; upgrades to cash flow, PBT, and EPS
expectations at interims; settlement of the MXC loan notes; and integration of Kinetic,
consolidation of the Brixx perpetual licence; multiple announcable new contract wins;
go-live (for Cluid Housing Association and the New Gorbals Housing Association) for
the first two deployments of the full product suite; and further sales of the full product
suite. With the acquisition of Deeplake in January, and of the Indian outsourced R&D
team in February, there is a great deal of constructive activity within the business,
generating the expected forecasts and offering further potential for growth.
?We look forward to prelims, expected in June, for more detail and the opportunity
to roll forecasts forward a further year and review our target price. Target 125p,
equivalent to an unchallenging FY20 14.4x EV/EBITDA, 18.5x P/E, and still overgenerous 5.7% free cash yield, and ripe for review.
A very confident note from FinnCap. Thankyou. They continue to see this year as an excellent one for Castleton, and it seems from what they say they anticipate a target price raise on results. And the prospect of having the ability to be pretty much debt free in a year. Strategy working, more of the same this year as last.
Certainly was a good report. Quite often when a company is only meeting targets it can be a little negative but CTP has set targets for a growing company and is progressing very well by meeting said targets.
I'm sure they will upgrade tp on their next full review.
Looks great, I'm pleased for the long term holders here, I'd imagine this will go higher yet imo
FinnCap list the growth drivers and proof points. These strengthen the Castleton proposition for the year ahead. I mention once again, that £600k pa will now be available for the bottom line as a result of the Agile mobile licence becoming free to Castleton from the beginning of this month, with no additional final payment due.