Edison Investment Research Limited
Edison Investment Research Limited: Edison issues outlook on CREALOGIX Group
(CLXN)
16-Oct-2019 / 10:23 GMT/BST
London, UK, 16 October 2019
Edison issues outlook on CREALOGIX Group (CLXN)
CREALOGIX is a leading, global, digital banking engagement platform
provider. Despite 17% revenue growth, FY19 EBITDA was slightly below our
expectations at CHF1.9m as the company moves to a SaaS model faster than
expected. The SaaS transition is expected to drag on results until FY21,
before delivering a full year of benefit in FY22. We have lowered our
forecasts and now anticipate 4% and 5% revenue growth in FY20 and FY21, with
EBITDA of CHF2.6m and CHF4.7m respectively. Management also announced a
transformation programme to position CREALOGIX for future growth, funded by
a convertible bond refinancing (details on page 8) to secure additional
headroom for working capital and M&A.
Looking at CREALOGIX's trading peers suggests that a valuation of c 2.5-3.0x
revenues and c 15-20x EBITDA is achievable following a successful SaaS
transition in line with management targets. Based on our FY22 estimates,
this would suggest that an EV of CHF250m+ is achievable (a 100% premium to
today's share price). For investors willing to take a medium-term view,
CREALOGIX's valuation of 1.3x FY20e sales is attractive, particularly when
compared to its closest peers. However, we would note that restricted share
trading liquidity continues to limit exit opportunities.
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890975 16-Oct-2019
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(END) Dow Jones Newswires
October 16, 2019 05:24 ET (09:24 GMT)
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