Cordel Group

There are five key reasons why Cordel represents an exciting investment case.

First, Cordel has won substantial, multi-year contracts with major railroads and rolling stock companies globally, including Amtrak, Network Rail, ARTC and Angel Trains, demonstrating a strong market fit. With a strong pipeline, management is hoping to double the company’s customer base over the next 12 months.
Second, once embedded within an organisation, the group becomes a data management beachhead, enabling stickiness and unlocking up- and cross-sell opportunities by leveraging data it has already processed. The sale of one additional use case can potentially double the value of a contract, alongside efficient and low cost delivery.
Third, with considerable investment in sales and delivery now complete, Cordel is well-positioned for operationally geared growth, especially in the substantial target North American market where the company has seen significant pipeline expansion. The company’s established partner network should support more global growth.
Fourth, globally, infrastructure digitalisation and spatial computing trends present significant market opportunities as sensor proliferation expands collectible data volumes. Cordel’s automated solution helps railroads derive value from data that might otherwise be siloed and unusable. Substantial government funding and initiatives in the group’s key markets are also driving customer adoption.
Finally, at 1.3x FY24 EV/sales, the valuation overlooks the expansion potential with the company’s top tier clients, as well as the potential to double its customer base in a short timeframe by executing on the current pipeline. Key re-rating catalysts are proving additional use case demand, upselling contracts and winning new clients, especially in the US. Cordel has a £10m mid-term recurring revenue target, where delivering this with the current cost structure would provide strong validation for the current strategy.

Cordel offers a compelling railroad solution, as shown by its impressive client base of major railroads worldwide. With an established footprint among existing customers and a growing pipeline of new customers, Cordel is well-positioned for rapid top-line growth and margin expansion.

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