Aspire Global — ‘Yet another record quarter’

Consumer

Aspire Global

‘Yet another record quarter’

Q121 results

Travel & leisure

6 May 2021

Price	SEK71
Market cap	SEK3,302m
€0.1/SEK
Net debt (€m) at 31 March 2021 (excluding IFRS 16 liabilities and client cash)		2.9

Shares in issue		46.5m
Free float		25.8
Code		ASPIRE

Primary exchange	Nasdaq First North Premier Growth Market, Stockholm
Secondary exchange		N/A

Share price performance

%	1m	3m	12m
Abs	17.6	38.9	243.0
Rel (local)	13.8	23.8	121.1

52-week high/low

SEK71

SEK20

Business description

Aspire Global is a leading B2B provider of iGaming solutions, offering partners all relevant products to operate a successful iGaming brand. It also owns/offers B2C online gaming brands, including Karamba. Aspire operates in 26 regulated markets across Europe, the US, South America, and Africa.

Next events

H121 results	19 August 2021
Q321 results	4 November 2021

Analysts

Russell Pointon	+44 (0)20 3077 5700
Sara Welford	+44 (0)20 3077 5700

consumer@edisongroup.com

Edison profile page

Aspire Global is a research client of Edison Investment Research Limited

Aspire Global’s (AG’s) Q121 results highlighted strong broad-based organic revenue growth (+35.6% y-o-y) complemented by improving sequential growth from recent M&A, which led to an impressive expansion in EBITDA margin (+230bp y-o-y to 17.8%). Through Q121, AG’s enhanced and more integrated offering enabled it to execute well on its strategy of expanding to more regulated markets, attracting new customers and growing sales to existing partners. We upgrade our FY21 and FY22 revenue and EBITDA forecasts by 4%, leading to an increase in our DCF-based valuation to SEK100 per share, upside of 41% from the current share price.

Year end	Revenue inc VAT (€m)	EBITDA* (€m)	EPS* (€)	DPS (€)	P/E (x)	Yield (%)
12/19	131.4	21.8	0.32	0.00	21.5	N/A
12/20	161.9	27.6	0.32	0.00	21.4	N/A
12/21e	195.6	34.7	0.55	0.20	12.6	2.9
12/22e	220.4	40.6	0.63	0.29	11.0	4.2

Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Q121: Sequential revenue and profit growth

AG’s Q121 revenue (including VAT) grew by 42.6% y-o-y (organically by 35.6%) with sequential (ie quarter-on-quarter) growth from all businesses. The year-on-year improvement in EBITDA margin to 17.8% (Q120: 15.5%) reflects the expected operational leverage on strong revenue growth, and the increasing contribution of the higher-margin businesses (Games and Sports) to the mix. The higher profitability led to an almost trebling of operating cash flow versus Q120, which along with existing cash on hand and bridging loans from connected parties enabled AG to redeem the bond maturity in April as expected.

Forecasts: Revenue and EBITDA upgraded by 4%

Following the strong Q121 results, we upgrade our revenue and EBITDA forecasts for FY21 and FY22 by 4%, primarily driven by higher revenue growth assumptions for Games and B2C, while retaining prior assumptions for EBITDA margins in all divisions. Our FY21 forecasts for revenue of €195.6m and EBITDA of €34.1m (using AG’s definition) compare to management’s financial targets of €200m and €32m respectively. Our higher EBITDA forecast reflects the increasing importance of the recent higher-margin acquisitions, Games and Sports.

Valuation: Discount to DCF and peers

After the upgrade to forecasts, our DCF valuation increases to SEK100 per share from SEK95 in our initiation note. AG’s valuation multiples remain at a significant discount to its larger peers. Its FY21 P/E multiple of 12.6x is a 71% discount to the adjusted average of its peers. If AG continues to execute well on its strategy and increase its scale, we expect the valuation gap versus its peers to narrow.

Q121: Strong revenue growth and margin expansion

Strong organic revenue growth (+35.6% y-o-y) and the contribution from the recent acquisition (consolidated from the start of Q420) of Sports led to ‘yet another record quarter’ financially for AG. The underlying growth is encouraging as it is broad based across the divisions, revenue grew for all divisions quarter-on-quarter, and the first quarter is traditionally the smallest quarter of the year from a financial perspective. AG’s Q121 benefits from a relatively easy year-on-year comparative from Q120, when total revenue grew by 1.5% versus the total FY20 growth of 23.2%.

Year-to-date AG has broadened its market presence, realised intra-group revenue synergies and signed partnerships with new key customers.

Group performance

In Q121, revenue including VAT increased year-on-year by 42.6% to €48.1m, revenue excluding VAT by 42.8% to €46.5m, EBITDA (AG’s definition) by 64.2% to €8.6m equating to a margin of 17.8%, PBT (excluding associates) by c 137% to €6.7m, and adjusted diluted EPS by c 161% to €0.13.

Exhibit 1: Summary income statement

€m	Q120	Q220	Q320	Q420	FY20	Q121
Revenue (inc VAT)	33.7	43.7	40.1	44.4	161.9	48.1
Growth y-o-y	1.5%	33.5%	20.7%	37.6%	23.2%	42.6%
Organic y-o-y	(7.8%)	21.3%	8.8%	30.8%	15.0%	35.6%
Revenue (excl VAT)	32.6	42.2	39.0	43.1	156.8	46.5
Growth y-o-y	0.5%	32.6%	21.2%	38.4%	23.0%	42.8%
Gaming duties	(0.9)	(1.0)	(1.2)	(1.3)	(4.3)	(1.6)
% of revenue inc VAT	2.7%	2.3%	2.9%	2.8%	2.7%	3.3%
Distribution expenses	(22.6)	(29.8)	(27.4)	(28.7)	(108.4)	(31.4)
% of revenue inc VAT	67.0%	68.1%	68.3%	64.6%	67.0%	65.3%
Administration expenses	(3.9)	(4.4)	(3.9)	(4.9)	(17.0)	(5.0)
% of revenue inc VAT	11.5%	10.0%	9.7%	11.0%	10.5%	10.3%
EBITDA (AG definition)	5.2	7.1	6.6	8.3	27.1	8.6
Margin	15.5%	16.1%	16.4%	18.6%	16.7%	17.8%
Growth y-o-y	(14.2%)	16.4%	25.7%	189.9%	24.8%	64.2%
EBITDA (Edison definition)	5.2	7.2	6.7	8.5	27.6	8.8
Margin	16.0%	17.1%	17.3%	19.6%	17.6%	18.9%
Growth y-o-y	(14.5%)	18.5%	28.3%	192.9%	26.6%	68.3%
Operating income	3.9	5.7	4.9	10.6	20.8	6.5
Margin	11.6%	12.9%	12.3%	23.8%	12.9%	13.6%
Growth y-o-y	(24.4%)	10.0%	15.5%	91.6%	17.3%	66.3%
Net finance costs	(1.1)	(0.9)	(1.0)	(1.4)	(4.4)	0.1
PBT (excluding associates)	2.8	4.8	3.9	9.2	16.4	6.7
Growth y-o-y	(46.3%)	7.1%	(15.1%)	183.5%	(3.0%)	137.2%
Tax	(0.3)	(0.3)	(0.1)	(0.7)	(1.4)	(0.6)
Effective rate	9.4%	6.6%	2.4%	7.8%	8.5%	8.5%
PAT	2.5	4.5	3.8	8.5	15.0	6.1
Associates	(0.2)	(0.3)	(0.3)	(1.1)	(1.9)	(0.1)
Net income	2.4	4.2	3.5	7.3	13.1	6.0
EPS (€)	0.05	0.10	0.09	0.09	0.32	0.13
Growth y-o-y	(43%)	8%	(16%)	0%	0%	161%

Source: Aspire Global

As noted in our initiation report, depending on the segment, AG may disclose a number of revenue figures: revenue gross of VAT, which is similar to how the online gaming operators report revenue; revenue net of VAT; and revenue including inter-segment revenue, which we do not use. In addition, AG includes share-based payments in EBITDA whereas we customarily exclude them. At the divisional level, share-based payments are not disclosed, therefore in the commentary on the segments and group performance we will use management’s definition of EBITDA, but our presented EBITDA numbers in the financial summary use our definition. Management’s commentary on revenue and profitability, specifically EBITDA, is typically with reference to revenue including VAT, therefore we will be consistent with management’s narrative.

AG’s Q121 organic growth rate for revenue (including VAT) of 35.6% y-o-y was its highest quarterly growth since the start of FY20, albeit it had a relatively easy comparative of a year-on-year decline of 7.8% in Q120 when B2C’s revenue fell year-on-year.

AG demonstrated good operating leverage as its EBITDA margin improved from 15.5% in Q120 to 17.8% in Q121. The EBITDA margin benefited from the increasing importance of the higher-margin businesses Games and Sports (see below). From a cost perspective there was operating leverage on both distribution expenses (new synergies with Pariplay offsetting the typical cost pressures of marketing and increasing exposure to regulated markets) and administration expenses (10.3% of revenue in Q121 versus 11.5% in Q120), while gaming duties increased relative to revenue (3.3% versus 2.7%) as the share of revenue from taxed and locally regulated markets continued to increase (72% in Q121 versus 70% in Q120).

Net financing moved from being a net expense of €1.1m in Q120 to a net income of €0.1m in FY21 due to changes in forex and fees, and changes with respect to related group funding and deferred and contingent consideration. Versus Q120, AG had an improved net cash position (see below).

The effective tax rate for Q121 of 8.5% was consistent with FY20 and the rate used in our forecasts for FY21 and FY22.

There was a minor reduction in associate losses to a loss of €0.1m from a loss of €0.2m in Q120.

Divisional performance

All of AG’s businesses reported a sequential (ie quarter-on-quarter) improvement in revenue from Q420 to Q121, and all businesses except Core and B2C reported a sequential improvement in EBITDA. In aggregate, total B2B revenue organic growth was 36.6% y-o-y.

The year-on-year improvement in AG’s group EBITDA margin to 17.8% in Q121 from 15.5% in Q120 is due to the improvement in margin of the B2B businesses (21.4% in Q121 versus 16.7% in Q120), partially offset by a lower margin for B2C (10.3% in Q121 versus 13.0% in Q120). The higher B2B margin reflects improved year-on-year margins for both Core (from 15.3% to 18.0%) and Games (from 25.1% to 32.9%), as well as the mix benefit of a greater relative contribution from the higher-margin businesses Games and recently acquired Sports (30.2%).

Exhibit 2: Divisional financial performance

€m	Q120	Q220	Q320	Q420	FY20	Q121
Revenue (inc VAT)
- Core	19.6	26.3	23.8	23.0	92.7	24.4
- Games	3.1	4.0	4.0	4.9	16.0	5.6
- Sports				2.2	2.2	2.4
- B2B total	22.7	30.3	27.8	30.1	110.9	32.3
- B2C	11.0	13.4	12.3	14.3	51.0	15.7
Total	33.7	43.7	40.1	44.4	161.9	48.1
Growth y-o-y:
- Core	0.7%	34.9%	13.6%	26.7%	14.3%	24.3%
- Games	N/M	N/M	N/M	61.7%	424.1%	79.0%
- Sports	N/M	N/M	N/M	N/M	N/M	N/M
- B2B total	42.6%	56.0%	51.8%	54.7%	220.8%	59.5%
- B2C	(22.5%)	(1.9%)	0.7%	29.8%	(0.1%)	43.5%
Total	1.5%	33.5%	20.7%	37.6%	23.2%	42.6%
EBITDA (AG definition)
- Core	3.0	4.4	4.4	4.3	16.1	4.4
- Games	0.8	1.0	1.1	1.3	4.2	1.8
- Sports				0.6	0.6	0.7
- B2B total	3.8	5.4	5.5	6.2	20.9	6.9
- B2C	1.4	1.6	1.1	2.0	6.2	1.6
Total	5.2	7.1	6.6	8.3	27.1	8.6
EBITDA margins:
- Core	15.3%	16.9%	18.6%	18.6%	17.4%	18.0%
- Games	25.1%	25.1%	26.6%	26.8%	26.0%	32.9%
- Sports				29.0%	29.0%	30.2%
- B2B total	16.7%	18.0%	19.7%	20.7%	18.9%	21.4%
- B2C	13.0%	12.0%	8.8%	14.3%	12.1%	10.3%
Total	15.5%	16.1%	16.4%	18.6%	16.7%	17.8%

Source: Aspire Global

The key operational and financial highlights for the divisions during Q121 are as follows:

■

Core: during Q121 AG has completed the integration of the BtoBet platform as well as making other enhancements to the Core platform. Management believes that the integrated offering provides a key competitive advantage versus peers, and will enable it to expand share of wallet with existing customers as well as from more potential new customers, who either do not have a sportsbook or have a sportsbook with an alternative provider. It highlights that the recently launched CRM system, AspireEngage and other enhancements have been well received.

■

Games: Pariplay continued to benefit from the addition of new operators (17 new deals signed during the period including in the United States, UK, Portugal, Spain and Nordics) who are attracted to the aggregation services and the range of proprietary and third-party content, both of which continue to expand. Pariplay is making good progress in building its presence in the United States as evidenced by the recent partnership launch in New Jersey; receipt of an interim iGaming supplier licence in West Virginia, and the post quarter end announcement of a deal with platform provider GAN that should enable Pariplay to accelerate its expansion in the United States. During Q121, Pariplay’s revenue increased by 79% y-o-y and c 13% q-o-q. Since being acquired in Q419, its quarterly revenue has grown from €3.0m to €5.6m in Q121, a cumulative growth rate of c 83%. The strong revenue growth has led to high operating leverage notably in Q121; the EBITDA margin has increased from 25.1% in Q120 to 26.8% in Q420 and 32.9% in Q121.

■

Sports: in its second financial quarter of ownership, BtoBet demonstrated sequential (ie quarter-on-quarter) growth in revenue of c 7% and EBITDA of c 12%, which included contributions from new partners in Africa. During the quarter, the platform was awarded full certification in the UK, which has already proven to be attractive to operators with the announcement of a new partnership that targets the UK, Ireland and Ghana. Management’s ambition is to gain certification in all regulated markets, which it believes can be done relatively easily, and which will enable it to serve existing and new customers. After the quarter end, AG added Grupo Televisa as a partner, which has switched from its previous sportsbook provider to BtoBet, and management will look to develop the relationship across the wider AG portfolio.

■

B2C: Q120 revenue of €15.7m was its highest every quarterly revenue, and reflects year-on-year growth in all key performance indicators (KPIs), that is active users, number of transactions and first-time deposits, as marketing expenses increased (from 30.8% of net gaming revenue (NGR) in Q120 to 35.8% in Q121). This follows a relatively inconsistent quarterly performance for the KPIs through FY20. The increased marketing was to support the launch of the new Griffon brand, which is performing well, and growth in the UK. The increased investment meant that B2C’s strong year-on-year revenue growth of 43.3% translated to EBITDA growth of 14.4% and an EBITDA margin of 10.3%. The division remains subject to a review with the aim of determining how best to accelerate growth.

Cash flow and balance sheet

At the end of Q120 AG’s net debt position excluding IFRS 16 liabilities and client cash was €2.9m compared to €5.2m at the end of FY20. IFRS 16 liabilities of €2.2m were modestly lower than €2.5m at the end of FY20.

AG’s quarter-end cash position improved to €41.8m from €28.7m at the end of FY20 due to higher operating cash flow generation on an absolute basis and relative to revenue, a modest reduction in investing cash outflows, and the receipt of a €10.3m bridging loan from major shareholders.

AG’s operating cash flow of €5.3m in Q121 versus Q120’s €1.9m reflects the higher group profitability and relatively stable working capital outflows relative to revenue. Investing cash flows of €2.2m were marginally lower than Q120’s €2.9m, predominantly due to the absence of investment in associates (€0.5m in Q120), and a modest reduction in internal investment in fixed and intangible assets (€2.2m in Q121 versus €2.4m in Q120).

The closing gross debt position of €38.4m mainly reflects the addition of the above €10.3m bridging loan from major shareholders during the period to the FY20 closing debt of €27.9m.

Following the period end, on 6 April 2021, the company repaid the senior secured bonds of €27.5m, which, as highlighted in our initiation note, was funded by cash on hand and the bridging loan.

Forecasts: Revenue and EBITDA upgraded by 4%

We upgrade our revenue and EBITDA forecasts for FY21 and FY22 by 4% as shown in Exhibit 3. The upgrades reflect more optimistic growth assumptions for Games and B2C, and a modest upgrade for Core. We make no changes to our assumptions for EBITDA margins in either year.

Exhibit 3: Forecast changes

€m	FY20	FY21e new	FY22e new	FY21e old	FY22e old	Change FY21e	Change FY221e
Revenue (inc VAT)
- Core	92.7	103.6	115.4	101.9	112.9	2%	2%
- Games	16.0	21.8	26.3	19.7	24.0	11%	10%
- Sports	2.2	11.5	15.9	11.5	15.9	0%	0%
- B2B total	110.9	136.9	157.6	133.1	152.8	3%	3%
- B2C	51.0	58.7	62.9	54.6	58.5	7%	7%
Total	161.9	195.6	220.4	187.7	211.3	4%	4%
Revenue (excl VAT)
- Core	91.2	101.8	113.3	100.1	110.8	2%	2%
- Games	16.0	21.8	26.3	19.7	24.0	11%	10%
- Sports	2.2	11.5	15.9	11.5	15.9	0%	0%
- B2B total	109.4	135.1	155.4	131.3	150.7	3%	3%
- B2C	47.5	54.6	58.4	50.8	54.3	7%	7%
Total	156.8	189.7	213.8	182.1	205.0	4%	4%
EBITDA (AG definition)
- Core	16.1	18.0	20.1	17.7	19.7	2%	2%
- Games	4.2	5.7	6.8	5.1	6.2	11%	10%
- Sports	0.6	3.4	5.6	3.4	5.6	0%	0%
- B2B total	20.9	27.1	32.5	26.2	31.4	3%	3%
- B2C	6.2	7.1	7.6	6.6	7.1	7%	7%
Total	27.1	34.1	40.1	32.8	38.5	4%	4%
EBITDA margin
- Core	17.4%	17.4%	17.4%	17.4%	17.4%
- Games	26.0%	26.0%	26.0%	26.0%	26.0%
- Sports	29.0%	29.2%	35.0%	29.2%	35.0%
- B2B total	18.9%	19.8%	20.6%	19.7%	20.6%
- B2C	12.1%	12.1%	12.1%	12.1%	12.1%
Total	16.7%	17.5%	18.2%	17.5%	18.2%

Source: Aspire Global, Edison Investment Research

Management’s financial targets for FY21 that were introduced in FY19 are unchanged: revenue (including VAT) of €200m and EBITDA of €32m, implying an EBITDA margin of 16%. Our revenue forecast for FY21 of €195.6m is c 2% below management’s target, but our EBITDA of €34.1m is c 7% ahead, due to the addition of higher-margin acquisitions since the guidance was set in FY19.

Valuation

The upgrade to forecasts for FY21 and updates to changes in net debt increase our DCF-based valuation to SEK100 from SEK95 at our initiation, representing 41% upside from the current share price. We use a WACC of 9% and a terminal growth rate of 2% beyond our terminal year, 2030.

Relative to its peers, AG continues to trade at a significant discount. AG’s EV/EBIT of 11.4x for FY21 is a 59% discount to the adjusted peer average of 27.7x, and the P/E of 12.6x is a 71% discount to the adjusted average of 44.1x. Relative to most of its peers, AG’s market capitalisation is smaller. However, it continues to scale its business through a combination of organic growth and M&A. If AG continues to execute well, we expect the valuation gap relative to its larger peers to narrow.

Exhibit 4: Peer valuations

Company	Share price (local ccy)	Ccy	Market cap (€m)	Sales growth CY21 (%)	Sales growth CY22 (%)	EBIT margin CY21 (%)	EBIT margin CY22 (%)	EV/ EBIT CY21 (x)	EV/ EBIT CY22 (x)	PE CY21 (x)	PE CY22 (x)	Div Yield CY21 (%)	Div Yield CY22 (%)
Bragg Gaming Group Inc	2.1	C$	259	0.6	7.0	2.5	2.1	200.1	226.6	N/A	N/A	N/A	N/A
Evolution Gaming Group AB (publ)	1,354.6	SEK	28,319	72.9	24.1	56.7	58.4	51.2	40.1	54.3	43.2	0.9	1.1
Gaming Innovation Group Inc	23.0	NOK	205	25.3	11.0	8.9	14.4	33.2	18.4	85.2	24.4	0.0	0.0
Gan Ltd	19.7	US$	694	190.8	27.8	(0.9)	7.8	N/A	66.0	N/A	92.1	0.0	0.0
International Game Technology PLC	16.6	US$	2,862	14.3	10.1	20.6	23.2	15.8	12.8	20.1	12.6	0.0	4.0
Kambi Group PLC	525.5	SEK	1,602	36.8	4.3	36.0	31.5	26.7	29.3	34.3	37.5	N/A	N/A
Playtech PLC	468.4	GBp	1,654	17.0	13.4	12.0	12.8	14.8	12.2	26.3	18.7	1.2	1.2
Scientific Games Corp	44.4	US$	3,556	14.9	11.9	16.4	19.4	24.6	18.7	N/A	24.3	0.0	0.0
Average				46.6	13.7	19.0	21.2	52.3	53.0	44.1	36.1	0.3	1.0
Average ex Bragg and Gan				30.2	12.5	25.1	26.6	27.7	21.9	44.1	26.8	0.4	1.3
Aspire Global	71	SEK	323	20.9	12.7	13.7	14.3	11.4	9.6	12.6	11.0	2.9	4.2
Premium/ (discount) to average ex Bragg and Gan				(31)%	2%	(45)%	(46)%	(59)%	(56)%	(71)%	(59)%	610%	237%

Source: Refinitiv, Edison Investment Research. Note: Priced 5 May 2021

Exhibit 5: Financial summary

	€m	2016	2017	2018	2019	2020	2021e	2022e
Year end 31 December		IFRS	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS
INCOME STATEMENT
Revenue		61.0	71.9	104.6	131.4	161.9	195.6	220.4
VAT		(0.8)	(1.1)	(2.1)	(3.9)	(5.1)	(5.9)	(6.6)
Net revenue		60.2	70.8	102.5	127.5	156.8	189.7	213.8
Operating costs		(48.7)	(56.2)	(81.1)	(105.7)	(129.2)	(155.0)	(173.2)
EBITDA (Edison)		11.5	14.6	21.4	21.8	27.6	34.7	40.6
EBITDA		11.4	14.3	21.2	21.7	27.1	34.1	40.1
Normalised operating profit		10.6	13.3	19.5	18.7	22.8	28.3	33.6
Amortisation of acquired intangibles		0.0	0.0	0.0	(0.9)	(1.5)	(1.7)	(1.6)
Share-based payments		(0.1)	(0.3)	(0.2)	(0.1)	(0.5)	(0.5)	(0.5)
Reported operating profit		10.6	13.0	19.3	17.7	20.8	26.1	31.5
Net Interest		1.7	(0.0)	0.2	(0.8)	(4.4)	1.8	(0.4)
Profit Before Tax (norm)		12.3	13.3	19.7	17.9	18.4	30.1	33.2
Profit Before Tax (reported)		12.3	13.0	19.5	16.9	16.4	27.8	31.1
Profit Before Tax (incl associates)		12.3	10.6	17.2	15.4	14.5	25.8	30.1
Reported tax		(0.7)	(0.8)	(1.0)	(15.0)	(1.4)	(2.4)	(2.6)
Profit After Tax (norm)		11.6	12.6	18.7	16.5	17.0	27.7	30.5
Profit After Tax (reported)		11.6	12.3	18.5	1.9	15.0	25.5	28.5
Associates		0.0	(2.5)	(2.3)	(1.5)	(1.9)	(2.0)	(1.0)
Discontinued operations		3.6	1.3	0.0	0.0	0.0	0.0	0.0
Net income (normalised)		11.6	10.1	16.4	15.0	15.1	25.7	29.5
Net income (reported)		15.1	11.1	16.2	0.4	13.1	23.5	27.5

Average number of shares outstanding (m)		42.0	43.0	44.5	46.0	46.4	46.4	46.4
EPS - normalised (c)		27.7	23.5	36.8	32.7	32.6	55.3	63.7
EPS - diluted normalised (€)		0.27	0.22	0.35	0.32	0.32	0.55	0.63
EPS - basic reported (€)		0.36	0.26	0.36	0.01	0.28	0.51	0.59
Dividend (€)		0.27	0.28	0.09	0.00	0.00	0.20	0.29

Revenue growth (%)		N/A	17.9	45.4	25.7	23.2	20.8	12.7
EBITDA Margin (%)		18.7	19.8	20.3	16.5	16.7	17.5	18.2
Normalised Operating Margin		17.4	18.6	18.7	14.2	14.1	14.5	15.2

BALANCE SHEET
Fixed Assets		18.5	17.3	21.9	47.2	89.1	96.2	83.5
Intangible Assets and goodwill		2.8	5.0	7.0	25.6	67.4	71.7	76.6
Tangible Assets and Right-of-use assets		1.1	1.3	1.2	4.3	3.8	3.6	3.5
Investments & other		14.6	11.0	13.7	17.3	17.9	20.9	3.4
Current Assets		24.5	34.3	76.2	54.1	55.2	55.9	82.1
Debtors		10.7	20.1	21.7	24.6	26.2	28.7	30.7
Cash & cash equivalents including client cash		12.3	13.4	53.7	29.0	28.7	26.9	51.2
Other and restricted cash		1.5	0.9	0.8	0.4	0.3	0.3	0.3
Current Liabilities		(15.4)	(25.5)	(32.2)	(37.7)	(77.1)	(70.3)	(69.5)
Creditors		(6.8)	(11.5)	(13.7)	(16.6)	(24.2)	(29.4)	(33.4)
Tax and social security		(5.6)	(10.5)	(11.3)	(12.9)	(12.3)	(12.3)	(12.3)
Short term borrowings		0.0	0.0	(0.5)	(0.5)	(27.9)	(10.0)	0.0
Other		(3.0)	(3.5)	(6.7)	(7.6)	(12.7)	(18.6)	(23.8)
Long Term Liabilities		(0.7)	(0.7)	(27.5)	(29.4)	(19.2)	(19.2)	(19.2)
Long term borrowings		0.0	0.0	(26.9)	(27.2)	0.0	0.0	0.0
Other long-term liabilities		(0.7)	(0.7)	(0.7)	(2.2)	(19.2)	(19.2)	(19.2)
Net Assets		26.8	25.4	38.5	34.2	47.9	62.6	76.9
Minority interests		0.2	0.2	0.2	0.2	(0.3)	(0.3)	(0.3)
Shareholders' equity		27.0	25.6	38.7	34.4	47.6	62.3	76.6

CASH FLOW
Normalised operating profit		10.6	13.3	19.5	18.7	22.8	28.3	33.6
Depreciation and amortisation		0.8	1.2	1.9	4.0	6.3	6.4	7.0
Working capital		(0.2)	0.8	4.5	(2.4)	5.9	4.0	2.9
Exceptional & other		2.5	0.8	(0.6)	(1.3)	(4.1)	(1.6)	(1.6)
Tax		(0.8)	(0.1)	(0.9)	(14.5)	(1.3)	(2.4)	(2.6)
Operating cash flow		13.0	16.0	24.5	4.5	29.6	34.8	39.3
Capex		(2.4)	(3.6)	(3.9)	(6.3)	(8.7)	(10.5)	(11.8)
Acquisitions/disposals		0.0	0.0	0.0	(12.8)	(15.6)	(4.7)	0.0
Associates		(0.4)	(4.0)	(2.8)	(2.2)	(2.1)	(2.0)	(1.0)
Net interest		0.0	0.0	(0.8)	(2.0)	(2.0)	(1.3)	(0.4)
Equity financing		0.0	4.8	0.0	0.0	0.0	0.0	0.0
Debt financing		0.0	0.0	26.9	0.0	0.0	(17.9)	(10.0)
Dividends		(11.5)	(12.0)	(3.8)	(5.4)	0.0	0.0	(9.4)
Other		(0.1)	(0.1)	0.4	(0.5)	(1.5)	0.0	17.5
Net Cash Flow		(1.432)	1.152	40.308	(24.685)	(0.325)	(1.780)	24.244
Opening net debt/(cash) ex client money		(10.7)	(9.2)	(9.9)	(19.7)	4.1	5.2	(10.0)
FX		0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other non-cash movements		0.0	(0.5)	(30.5)	0.9	(0.7)	17.0	9.1
Closing net debt/(cash)		(9.2)	(9.9)	(19.7)	4.1	5.2	(10.0)	(43.4)

Source: Company accounts, Edison Investment Research

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