SNP: Well Positioned For Further Strong Growth
Edison | Feb 01, 2017 08:33AM ET
FY16 was a hectic year for SNP Schneider-Neureither & Partner (DE:SHFG), with three acquisitions successfully integrated, a €30m capital increase and a mammoth contract win announced in Q3 to combine the IT landscapes of two U.S. chemical companies (we assume Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD)) that are merging. Preliminary figures show FY16 revenues growing by c 42% to c €80m (we forecast €77m) and adjusted operating profit rose by c 66% to c €7m, for a c 8.8% operating margin. We are reviewing our forecasts and would expect to edge FY17 revenues higher towards the middle of the guidance, with the operating margin maintained at c 12%. Given SNP’s strong market position in software-based transformation projects, and the sustained high level of activity, we believe the shares remain attractive on c 22x our existing cash-adjusted FY18e EPS forecast.
Based on the FY16 preliminary numbers, Q4 revenues grew by c 51% to c €22.5m, while adjusted operating profit more than doubled to c €1.8m, generating a margin of c 8.1%. Incoming orders were slightly below Q3, though we note they benefited from the record $10m+ contract win that is expected to be delivered over the next c 18 months. In wake of the €30m capital increase, Dr Andreas Schneider-Neureither saw his shareholding dip from c 20.6% to 18.3%, as he reserved some of his subscription rights for senior employees. Dr Andreas Schneider-Neureither has recently lifted his shareholding back to 19.5% through on market purchases.
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SNP Schneider-Neureither & Partner - Well Positioned For Further Str
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