DJ Edison Investment Research Limited: Claranova (CLA): On track for strong earnings growth
Edison Investment Research Limited
Edison Investment Research Limited: Claranova (CLA): On track for strong
earnings growth
15-Oct-2020 / 09:19 GMT/BST
London, UK, 15 October 2020
Claranova (CLA): On track for strong earnings growth
Claranova reported strong organic revenue growth in FY20 while the EBITDA
margin reflected the immediate strategic priorities of PlanetArt and
Avanquest. The recent acquisition of CafePress is part of PlanetArt's
evolution to become a provider of personalised e-commerce and we have
revised our forecasts to incorporate the deal. We note the group's strong
cash position which provides funding for future internal and external
investment.
Reflecting the different business models and minority interests for each
division, we continue to use a sum-of-the-parts approach to valuation. Based
purely on peer group averages per division, we calculate a fair value of
&euro15.33 per share. However, once multiples are adjusted to reflect our
views on the growth and profitability of each division, we calculate what we
believe to be a more realistic valuation of &euro12.12 per share (up from
&euro11.52). Factors that could provide upside to our estimates would be
sustained high demand for photo printing, successful adoption of the
FreePrints Gift app in the US and returning recent acquisitions to
profitability.
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October 15, 2020 04:19 ET (08:19 GMT)
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