mVISE — New channel partners to fuel 2019 growth

mVISE (DB: C1VX)

Last close As at 21/12/2024

1.58

0.01 (0.64%)

Market capitalisation

14m

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Research: TMT

mVISE — New channel partners to fuel 2019 growth

mVISE has announced preliminary 2018 results showing revenue growth of 52% to €22.5m, and adjusted operating profit doubling to c €1.8m. Earnings were driven by growth in sales of the group’s high-margin software products and a solid performance by the consulting business. We expect the boost to the number of new channel partners at SaleSphere in Q419 and the creation of a new marketing promotion for mVise’s elastic.io in January to provide further impetus to earnings growth this year. With digitalisation of German industry giving the group strong growth impetus, while trading at a discount to its peer group.

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TMT

mVISE

New channel partners to fuel 2019 growth

Software & comp services

Scale research report - Flash

25 March 2019

Price

€3.95

Market cap

€33.4m

Share price graph

Share details

Code

C1VX

Listing

Deutsche Börse Scale

Shares in issue

8.4m

Last reported net debt at 30 June 2018

€8.6m

Business description

mVISE AG’s core competencies are cloud computing, integration of applications and digital solutions, IT security, enterprise data and mobility solutions. With over 150 staff, mVISE supports digitisation projects and offers cloud products such as the iPaaS platform elastic.io and SaleSphere, an integrated solution for digitisation of sales processes.

Bull

mVISE is well placed to benefit from the digital revolution with its orientation to IoT, digitalisation, integration, data science and security.

New strategy growing margins via increased high-margin product sales and staff efficiency.

Recent acquisitions, particularly elastic.io, have boosted the group’s product offerings, supporting margin and earnings prospects.

Bear

Project-based consulting business faces risk of skilled employee cost inflation.

Own-developed software product SaleSphere has not achieved expectations.

Debt levels rose sharply in H118 with the purchase of a consulting team from SHS Viveon.

Analyst

Anna Bossong

+44 (0)20 3077 5737

mVISE has announced preliminary 2018 results showing revenue growth of 52% to €22.5m, and adjusted operating profit doubling to c €1.8m. Earnings were driven by growth in sales of the group’s high-margin software products and a solid performance by the consulting business. We expect the boost to the number of new channel partners at SaleSphere in Q419 and the creation of a new marketing promotion for mVise’s elastic.io in January to provide further impetus to earnings growth this year. With digitalisation of German industry giving the group strong growth impetus, while trading at a discount to its peer group.

Surge in channel partners in the last two quarters

mVISE gained six new channel sales partners for its SaleSphere product in Q418: Infolox, OpusCapita, eggheads, Contenserv, AriBis and myview systems, giving a significant boost to SaleSphere’s market access. mVISE also deepened its cooperation with the Israel-based global software seller Magic Software in January. Magic Software will provide $2.5m in funding for tailoring elastic.io’s software integration platform for new customers. This will enable elastic.io to access larger clients for which a tailored product is a necessity.

Operating profit in line after 2018 revenue shortfall

Assuming a €0.5m revenue loss from the August 2018 sale of Just Intelligence, we estimate preliminary revenues were c 8% below management guidance of €25m, mainly reflecting delays to the ramp-up in channel partner numbers. Nevertheless, helped by high software product margins and a good consulting performance the group achieved an operating profit of €1.8m in line with the €1.8–2.0m guidance.

Multiples understate software platform potential

As a key provider of support to firms engaged in digitisation projects, mVISE is an attractive play on the mass business migration to Cloud computing and the take up of standardised software as a service, via its elastic.io integration platform and its SaleSphere sales digitisation platform. We see mVISE as attractively rated on a 2018 EV/EBITDA multiple of 11.7x. This prices it more or less in line with the IT consulting sector at 10.9x but at a significant discount to the average 21.3x multiple of the fast-growing software development sector, to which mVISE is becoming increasingly oriented.

Consensus estimates

Year
end

Revenue
(€m)

EBITDA
(€m)

PBT
(€)

EPS
(€)

EV/EBITDA
(x)

P/E
(x)

Yield
(%)

12/16

7.9

1.2

0.4

0.05

36.1

79.0

N/A

12/17

14.8

2.0

0.3

0.15

21.5

25.5

N/A

12/18p*

22.5

3.6

1.1

0.15

11.7

43.9

N/A

12/19e

27.0

4.7

2.8

0.29

8.9

15.8

N/A

Source: mVISE, SMC Research. Note: *Provisional.

Edison Investment Research provides qualitative research coverage on companies in the Deutsche Börse Scale segment in accordance with section 36 subsection 3 of the General Terms and Conditions of Deutsche Börse AG for the Regulated Unofficial Market (Freiverkehr) on Frankfurter Wertpapierbörse (as of 1 March 2017). Two to three research reports will be produced per year. Research reports do not contain Edison analyst financial forecasts.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

Any Information, data, analysis and opinions contained in this report do not constitute investment advice by Deutsche Börse AG or the Frankfurter Wertpapierbörse. Any investment decision should be solely based on a securities offering document or another document containing all information required to make such an investment decision, including risk factors.

This report has been commissioned by Deutsche Börse AG and prepared and issued by Edison, in consideration of a fee payable byDeutsche Börse AG. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the Edison analyst at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2019 Edison Investment Research Limited (Edison). All rights reserved FTSE International Limited (“FTSE”) © FTSE 2019. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd who holds an Australian Financial Services Licence (Number: 427484). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

Neither this document and associated email (together, the "Communication") constitutes or form part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares in the Company in the proposed placing should be made solely on the basis of the information to be contained in the admission document to be published in connection therewith.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document (nor will such persons be able to purchase shares in the placing).

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

The Investment Research is a publication distributed in the United States by Edison Investment Research, Inc. Edison Investment Research, Inc. is registered as an investment adviser with the Securities and Exchange Commission. Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1,185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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