eNewsletter Winter 2022
Alpha Finance an Athens-based well-known Financial Analyst firm analyses Profile’s activities and outlook for future expansion.
In particular, the analysts mention that “the Profile Group, with 30 years of experience, offers specialised solutions for the financial services industry across 45 countries and has a presence in major business centers in Europe, America, the Middle East, Asia, and Africa. Its solutions contribute to digital transformation with investment in cutting-edge technologies accounting for around 20% of the annual turnover.” They continue “The company also established a Development Center in Thessaloniki to become the hub of excellence for new technologies adopting latest trends in artificial intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA) and blockchain whilst is about to invest in Augmented Reality (AR) for the industries it operates.”
Organic growth and bolt-on acquisitions will be the key drivers of growth. Over time more than 60% of sales concern international accounts whilst the recurrent revenue is about 65% with the EBITDA margin being close to 30% and the average percentage of free cash flow being near 60%. They conclude: “Alpha Finance estimates that the company is expected to present growth in the revenue (CAGR 2020-2029) by 11% for the next 9 years and increase of the adj EBITDA by approximately 10% for the same period whilst considering a modest adoption of EU support programs in Greece (RRF). At the same time, for the short-term period (2020-2025) the growth rates are expected to be around 23% and 20% respectively.
Alpha Finance, incorporating valuation exercise based on DCF methods and comparative EV/adj. EBITDA ’22 targets multiple approaches comparing these to similar types of companies internationally estimates the internal value of the company might reach 8.80 euros per share or 107 mn euros. In the case, where the company will proceed with the acquisition of a similar type of firm as was the case with the past acquisitions made i.e. Login in 2017 and Centevo in 2021, the indicative internal value is expected to increase by 0.90-1.10 euros per share whilst the Public Sector projects contribution could yield 0.30-0.60 euros more per share.”
The company traditionally trades at lower multipliers 35-40% compared to peers internationally. Lastly, it is worth noting that the company has a healthy balance sheet and strong cash position.
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