Berenberg ups target price on Microlise following FY results
By Iain Gilbert
Date: Wednesday 24 Apr 2024
(Sharecast News) - Over at Berenberg, analysts hiked their target price on software firm Microlise Group from 170.0p to 210.0p on Wednesday after the company published its in-line full-year results earlier in the month.
Microlise reported revenues of £71.7m and adjusted underlying earnings of £9.4m, which Berenberg noted represents a 13.1% adjusted EBITDA margin. It also recorded an annual recurring revenue run-rate of £47.7m, which "places it well" to deliver on its FY24 targets.
"With just 0.7% customer churn and a strong ARR run-rate heading into FY24, we think Microlise is very well placed to deliver on the full-year expectations, echoing management commentary. Conditions have improved, with new vehicle orders from OEMs having improved materially, enabling the business to deliver on its record backlog. For context, Microlise delivered 60% of its backlog in FY23, with the remaining 40% to be delivered in FY24," said Berenberg.
The German bank also highlighted that Microlise had announced a maiden dividend of 1.725p per share, a positive return to shareholders, and something the company will likely pursue as a progressive policy going forward. However, it also stated that Microlise's capital allocation policy remains focused on internal projects, followed by mergers and acquisitions, and then finally shareholder returns.
Berenberg, which stood by its 'buy' rating on the stock, added that Microlise trades on a 29x FY25 price-to-earnings ratio.
Reporting by Iain Gilbert at Sharecast.com
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