5th Sep 2024. 9.01am
Regency View:
Update
Regency View:
Update
Craneware jump on strong FY24 results and Microsoft partnership
Craneware (CRW), a leading financial software provider specializing in the US healthcare sector, saw its shares rise significantly on Tuesday following the release of its fiscal year 2024 results. The company’s strong financial performance, which exceeded market expectations, was a key driver behind the surge in share price.
Craneware reported a 9% increase in revenue, reaching $189.3 million, and a 6% boost in adjusted EBITDA, which rose to $58.3 million. This growth was fuelled by the continued success of its Trisus platform and the strategic investments the company has made in recent years, which are now paying off. Additionally, the company significantly reduced its total bank debt and maintained high levels of recurring revenue and customer retention, further bolstering investor confidence.
The announcement of a new strategic alliance with Microsoft also contributed to the positive market response. This partnership is expected to accelerate innovation, particularly in AI-based applications, and expand Craneware’s market reach through the Microsoft Azure Marketplace. The company’s strong start to FY25 and its optimistic outlook for sustained growth have reinforced its position as a key player in the healthcare software industry, driving the stock’s upward momentum.
CRW Daily Candle Chart
Ebiquity warns of H1 profit decline
Ebiquity (EBQ) has faced a challenging first half of 2024. The media investment analysis company reported a 7% decline in revenue, down to £37.9 million, primarily due to budget cuts by large clients.
This revenue shortfall significantly impacted profits, with Adjusted EBIT plummeting by 61% to £2.3 million. The profit margin also contracted sharply, dropping to 6% compared to 15% in the same period last year. This is largely because Ebiquity’s cost base is mostly fixed, relying on the retention of expert talent to deliver its premium services.
Despite these setbacks, Ebiquity expects a strong recovery in the second half of the year. The company has developed a substantial pipeline of revenue opportunities, with contractual coverage for over 80% of forecasted revenues for FY 2024. This should lead to a sharp increase in revenues and a significant improvement in profit margins during the latter half of the year.
However, the Board has cautioned that full-year profits are likely to fall below previous expectations, given the weak performance in H1 and the risks associated with executing new business and renewals in H2. The next few months, particularly September and October, will be crucial for determining the company’s full-year outcome.
CEO Nick Waters remains optimistic, particularly about the anticipated growth in the North American market, where a significant number of opportunities are expected to drive stronger revenues in the second half of the year.
EBQ Daily Candle Chart
Midwich reports record margins and solid revenue growth amidst market challenges
Midwich Group (MIDW) reported a 5.8% increase in revenue for the first half of 2024, reaching £646.1 million. Gross profit climbed by 12.2% to £111.8 million, boosting the gross margin to a record 17.3%.
However, operating profit fell by 30.9% to £12.8 million, and profit before tax dropped by 34.9% to £10.1 million. Profit after tax also declined by 36.1% to £7.4 million. Adjusted figures mirrored these declines, reflecting the ongoing market difficulties.
The company saw significant growth in technical products, which now account for nearly two-thirds of revenue. North America performed particularly well, with sales surging by 69% and achieving record gross margins.
Midwich made strategic acquisitions, including The Farm and DHL, to expand its market reach and product offerings. Despite ongoing macroeconomic challenges, the company is optimistic about a recovery in mainstream product demand in the second half of 2024. Trading since July has met expectations, and the Board maintains its full-year outlook.
MIDW Daily Candle Chart
Nexxen delivers record Q2 results and strategic financial milestones
Nexxen International (NEXN) reported record Q2 2024 results with significant revenue and profitability gains. The company’s Contribution ex-TAC (Contribution excluding Traffic Acquisition Costs) reached $83.1 million, up 4% year-over-year, while programmatic and CTV revenues also hit new highs.
Adjusted EBITDA surged by 27% to $26.8 million, improving the margin to 32% of Contribution ex-TAC from 26% in Q2 2023. Nexxen also achieved $151.9 million in net cash, completed a $20 million share repurchase, and launched a new $50 million program, while fully repaying $100 million in long-term debt.
For H1 2024, Contribution ex-TAC and programmatic revenues grew by 4%, and CTV revenue rose by 2%. Adjusted EBITDA increased by 29% to $38.7 million, with a margin of 25% on a Contribution ex-TAC basis.
The company reaffirmed its 2024 guidance, expecting Contribution ex-TAC of $340-$345 million and Adjusted EBITDA of around $100 million, with further growth anticipated in CTV revenue and data licensing. Nexxen also introduced its Data Platform, attracting key partners and enhancing its market position.
Nexxen repurchased 2,465,819 shares in Q2 and announced a new $50 million repurchase program. The Board of Directors has been streamlined to nine members, with Rebekah Brooks and Sagi Niri stepping down as Directors, though Niri remains CFO.
NEXN Daily Candle Chart
Synectics CEO Paul Webb passes away; Amanda Larnder appointed Interim CEO
Synectics (SNX) has announced the unexpected passing of Paul Webb, its Chief Executive Officer. Webb, who joined the company in 2004 and became CEO in 2015, played a crucial role in shaping Synectics’ strategic direction and financial growth.
In light of this, Amanda Larnder, the Chief Financial Officer, has been appointed as Interim Chief Executive Officer. She will be supported by the company’s Non-executive Directors, who bring extensive industry and executive experience.
While this news may create short-term uncertainty and potentially impact the stock, it does not alter our long-term positive outlook for Synectics. The company’s strong management team and strategic foundation are expected to continue guiding its progress effectively.
SNX Daily Candle Chart
Somero shares drop on half year results, despite long-term optimism
Shares in US cement screeder Somero (SOM) dropped last week following the release of their interim financial results for the first half of 2024. The company reported a 12% decline in revenue, down to $51.8 million from $58.9 million in the same period last year. This drop in revenue was attributed to a combination of project delays, elevated interest rates, labour shortages, and severe weather conditions that have impacted trading, particularly in North America and Australia.
Adjusted EBITDA also fell by 28%, totalling $12.4 million and resulting in a reduced margin of 23.8% compared to 29.5% in H1 2023. This decline in profitability reflects the broader challenges faced by the company, including a significant drop in cash flow from operations and a decrease in net cash.
Despite these short-term setbacks, Somero’s management remains optimistic about the future. They highlighted ongoing efforts to enhance operational efficiency, including a 15% reduction in the workforce and the implementation of strict cost controls. The company also launched two new products, including their first electric-powered laser screed, and is preparing to release a third product later in the year. Additionally, Somero has established a new service, repair, and training centre in Belgium to better serve European customers.
Somero’s leadership believes that the non-residential construction market remains resilient, and they anticipate a rebound in performance as external challenges ease. The company has projected full-year revenue of approximately $110 million and EBITDA of around $30 million, with expectations for a year-end cash balance of about $27 million. Despite the recent stock drop, Somero’s long-term outlook remains positive, with confidence in their ability to adapt and thrive once market conditions improve.
SOM Daily Candle Chart
Tracsis maintains steady growth amid strategic shift and operational changes
Tracsis (TRCS) has released a trading update for the year ended July 31, 2024, indicating financial results in line with revised guidance. The Group expects to report revenue slightly above £81 million, with an adjusted EBITDA of around £13 million, reflecting a modest decline from the previous year.
The transport technology provider highlighted a significant operational transformation during the year, including a focus on higher-margin software activities and the streamlining of its portfolio. This shift resulted in a short-term reduction in revenue by approximately £5 million but is expected to enhance long-term profitability and growth potential.
Despite disruptions from the UK General Election, which temporarily impacted activity levels in key divisions, Tracsis has seen a return to normal operations and continues to build a robust pipeline of software opportunities in the UK and North American rail markets. The Group’s strong cash position, with a balance of £19.8 million as of July 2024, supports ongoing investments in technology and potential acquisitions.
Looking ahead, Tracsis is optimistic about its growth prospects, particularly as the UK rail industry transitions towards more data-driven, customer-focused solutions under the new government. The company said it remains committed to delivering long-term value through both organic growth and strategic acquisitions.
TRCS Daily Candle Chart
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