RE: teccc14 Apr 2023 18:17
Troajan sys good call looks like rerate
This is a few months old news but nevertheless
provider of IT services, cyber security and cloud hosting declared its interims to end September.
They showed revenues up 49% at £11.32m, adjusted pre-tax profits of £1.10m (£0.96m), with earnings coming out at 2.0p (1.5p) at the halfway stage.
Due to recent acquisitions the £15m group’s first-half annual recurring revenue rate slipped from 86% to 75% on its Managed IT Services side, but that will return to growth.
The group’s Outlook comment noted that there is further potential for client growth and cross-selling.
It also stated that it is assessing various acquisition opportunities, to help it to further its ambition as a consolidator in its highly fragmented market.
Confidence remains that current year trading will be in line with market expectations.
Analysts Bob Liao and Carl Smith at Zeus Capital, the group’s NOMAD and Broker, estimate that the year to end March will se revenues rise from £14.7m to £20.5m, while adjusted pre-tax profits will increase from £2.0m to £2.4m, lifting earnings to 3.7p (3.4p) per share.
The brokers note that 68% of its customers take only one or two of the group’s five core managed services – meaning that there is considerable scope for cross-selling.
Zeus Capital has a 58p per share valuation on SysGroup shares.
On the basis of such estimates, this group’s shares are really quite appealing, trading at just 30p which puts them out on only 8.1 times current year earnings – that is too low for such growth potential."