Panoply Holdings (LON:TPX) http://www.stockwatchuk.com/

THE PANOPLY

Earlier today (9/12) I spoke with Neal Ghandi, the CEO and one of the founders to discuss today’s 6 month results for the period to 30/9/19.

The Panoply is a digitally native technology services company, built to service clients’ digital transformation needs. Founded in 2016, with the aim of identifying and acquiring best-of-breed specialist information technology, design and innovation consulting businesses across Europe, the Group collaborates with its clients to deliver the technology outcomes they’re looking for at the pace that they expect and demand. The PLC IPOed a year ago, on AIM and currently has a market cap of £36m with the owners / managers holding 52% of the equity. Neal said they had created ‘an awesome business’. The current backlog of business is £25m of which £12.8m is for the 2H and £12.2 for beyond. Expectations for the FY are thus under pinned in his opinion.

The 1H revenue numbers to end September were up 33%, at £13.4m, adjusted EBITDA at £0.9m OR £1.3m if removing the impact of investments in startup. PBT was £0.3m. Cash in the bank was £4.3m and HSBC provided RCF debt at £3.55m. The b/s is ‘solid’ and the intention is to pay a dividend with the final results.

The FUTUREGOV business division positions them well (‘cements’) for the digital transformation that is going on in public services. 59% of the PLC’s revenues are public service facing and a £20bn marketplace by 2025. The Panoply 1H public service revenue was £7.9m, operating for local authorities, central Gov (‘limited’), housing, health, education and the not for profit sector. Divisional collaboration is now responsible for 15% of revenues or £2m. Interestingly Note 5 to the results highlights the fact that FutureGov was only in the 1H numbers for a short period but if it had for the total period the revenue would have been £14.9m versus £13.4m and profits £2.6m as against £0.3m. The FY revenue numbers of £29.5m were reiterated by Neal (Stockopedia has £20m & net profit of £2.23m) with confidence. One reason for this confidence is the in-house modelling they have developed that allows workflow to be viewed instantaneously and from different perspectives. The 2021 estimated Stockopedia revenue is £35m.

Neal’s confidence in the profit outlook and impressive cross selling was a feature of the call. 15% of…

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