Altitude Group – new contract wins sees broker up forecasts and valuation
Analysts Andy Hanson and Carl Smith at Zeus Capital have upped their estimates for the current year to the end of this month for the Altitude Group (LON:ALT).
The trigger was a fresh guidance from the Sheffield-based company, which owns and develops technology solutions and services in North America and the UK.
The £29m capitalised company offers patented technology platform to its network with a built-in supply chain, as well as combines an e-commerce trading platform with a cloud-based CRM and order management system for business intelligence requirements; e-commerce website solutions with in-built patented online designer and pre-loaded product databases; patented online design solutions; and virtual sample services that allow personalized design on a product with imprint technique.
It also provides various services, such as supplier relations, negotiated group discounts, events and exhibitions, catalogues, artwork services, and marketing programmes.
In addition, the company provides various design tools, applications, and website pop-up stores for promotional product distributors and suppliers.
New Wins – worth $30m
The group has signed up $30m of new contracts, all starting to earn in the first half of the new financial year beginning 1st April.
The new wins, it is stated, will have a material impact on the group and demonstrate the success in the development and growth of its pipeline, yielding positive results across its Merchanting Programmes.
CEO Nichole Stella stated that:
"We are delighted to be starting our new financial year with these significant new contracts, showcasing rapid progress in the Group's ability to grow its long-term revenue base.
With investment focused on business development, FY23 has proven to be a pivotal year for the Group, resulting in excellent visibility of revenues through these multimillion-dollar long-term contract wins."
Analyst Opinions – valuation up to 57.4p a share
Hanson and Smith at the group’s NOMAD and Broker Zeus Capital consider that the shares trade at a discount to intrinsic value and have upped their valuation to 57.4p a share, some 40% better than last night’s closing price of 41p.
For the year to the end of this month they are estimating revenues to have risen to £17.8m (£11.9m), with adjusted pre-tax profits of £0.9m (£0.1m) and trebling earnings to 1.5p (0.5p) per share.
For the year to end March 2024 they go for £26.1m sales, £1.3m profits and 1.7p earnings.
The contract wins help to boost the following year figures to £35.6m revenues, £2.2m profits and 2.5p earnings.
Conclusion – good upside
More big contract news can be expected as its opportunity pipeline increases.
Trading into the new year will be strong.
This group’s shares at last night’s close of 41p look to be good value.