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  • Writer's pictureGuillermo Serrano pace is set to accelerate in 2H19

The overall operational results were a marked improvement from 1Q19, confirming the company is on the path to another year of continued growth. The reported 2Q19 profit before tax of €192k was flat compared to a year ago.

The most salient number this quarter belongs to the SaaS division with a 24% sales increase to almost €1 million, the highest ever. New product development and a successful international expansion boosted this division.

Gross profits were up by 15% relative 2Q18, a marked acceleration from the -3% reported in 1Q19 and paving the way for more acceleration in 3Q19 and 4Q19.

The cost base rose by 29% on the back of recent hiring (net increase of 17 employees to 84), more R&D related expenses (+64%), additional costs of increased presence abroad and some one-off consultancy items. We expect operational expenses to level off during the remainder of the year.

The reported Ebitda was flat on the quarter at €534k, although down 27% to €270k if capitalizations are excluded. Financial expenses were, as in recent quarters, relatively minor at €61k.

Net debt stood at €1.5 million as of 2Q19 and remains on course for our €1.1 million target by year-end. The continued decline in the net debt of the company is a reflection of the cash generative nature of the business.

We maintain our financial forecasts and target price unchanged, with an expectation of an even stronger 2H19 (partly based on the softer 2H18 relative to 1H18).

We maintain our BUY recommendation and a target price of €1.40 per share.


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