LONDON, UK / ACCESSWIRE / November 3, 2017 / 2017 has been a year of major change for SNP (XETRA: SHF) (FSE: SHF), including two major acquisitions, debt and equity capital raisings, corporate restructurings, new product offerings launched and new training centres established. This has involved a significant cost in both financial terms and management time. There has been €4m in one-off costs, and management expects to report break-even at the EBIT level in FY17. Excluding one-off costs, the FY17 EBIT margin is expected to be c 3.3%. Following the acquisitions, the group now has a presence in most major regions globally. Hence, SNP now looks better positioned to deliver on its goal to be the global leader in software-based transformation projects. Following the recent correction, we believe the shares look increasingly attractive on c 18x our FY19e EPS.
The stock trades on c 37x our FY18e EPS, which falls to c 18x in FY19e. Our discounted cash flow valuation (based on c 7.6% organic revenue CAGR over 10 years, 10% WACC, 16% long-term margin and 2% terminal growth) is €40.75/share, 41% above the current share price.
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