Journeo – strategic acquisition strengthens service offer, shares 418.50p, TP 602p

02.09.2025

Following on from its recently announced Trading Update, proclaiming that the transport information systems and technical services group was on-track for another record year, this morning Journeo (LON:JNEO) has reported the £10.7m acquisition of a cyber security systems business.

The Acquisition

Journeo, which is leading provider of information systems and technical services to transport operators, local authorities, and the public transport networks that connect them, has completed the acquisition of Crime and Fire Defence Systems, a specialist infrastructure protection systems integrator in physical and cyber security solutions to the UK Critical National Infrastructure, Defence and Utilities markets.

CFDS specialise in protection of Critical National Infrastructure sites including utilities and high security industrial and commercial applications. CFDS provide a range of solutions to enhance security infrastructure including cutting-edge access control systems, complex perimeter intrusion detection, and high-performance thermal, infra-red and visual surveillance systems.

Critical National Infrastructure protection relates to the safeguarding of essential facilities, systems, and networks, such as energy, water, transportation, and communications from threats such as terrorism, sabotage, cyberattacks, and natural disasters; to prevent severe national disruption, impact on national security, or loss of life.

Financial Benefits

For the 12 months ended 30 April 2025, CFDS reported audited revenue of £17.33m, PBT of £1.36m and had net assets of £3.93m.

With 4 months of FY25 remaining, it is expected that the Acquisition will add £4m revenue and £0.4m PBT to current FY25 market expectations which were Group revenue of £52m and adjusted PBT of £5.2m.

The Acquisition will also have a positive impact on FY26 revenue and adjusted PBT, which are expected to increase by £17m and £1.4m respectively, above current FY26 market expectations of £55m and £5.8m, whilst also prudently allowing for the necessary integration of policies, processes, systems and facilities.

Broker’s View

Analyst Andrew Renton, at Cavendish Capital Markets, rates the group’s shares as a Buy, with a Target Price of 602p against the current 418.5p.

He states that Journeo looks compelling on an FY25E Adj P/E of 13x (11x ex-cash P/E) vs peers on 16x, with further upside being seen if the remaining c.£9m of net cash balances are deployed on additional organic or acquisition opportunities leading to further earnings accretion.

My View

This looks like a very neat fit into the Journeo services portfolio, while its shares at the current 418.50p look like a suitable portfolio addition.

(Profile 07.04.21 @ 95.5p set a Target Price of 120p*)

(Profile 24.03.23 @ 147.5p set a Target Price of 175p*)

(Profile 24.07.23 @ 183p set a minimum Target Price of 200p plus*)

Asterisks * denote that Target Prices have been achieved since Profile publication.