Maintel Holdings – next week’s results will outline progress in this group’s new strategy, its shares at 220p, my new TP 275p

Next Tuesday morning will see the publication of the 2024 Final Results from Maintel Holdings (LON:MAI) which should carry a statement about the progression of the group in the last ‘transformative’ year.

The company has been on a journey to pivot from a generalist to a highly skilled specialist across three high-growth technology segments, with a strategy that was underpinned by the relaunch of the Maintel brand in November 2024.

Next week will be the first reporting event by new CEO Dan Davies, formerly the group’s CTO, who upon his appointment in late February this year stated that:

“It is an exciting time for Maintel and over the past year we have made good progress in transforming both our market positioning and our offering which, I believe, puts us in an even stronger position to support our customers to service their managed service needs."

The Business

With offices in both London and Blackburn and with some 450 employees, the company was founded in 1991 and it listed on AIM in 2004.

The £32m-capitalised business is a leading provider of cloud communications, security and connectivity managed communications services to the UK public and private sectors.

Its services aim to help its clients create customer experiences, services and workplaces that inspire and empower people, with a focus across three strategic pillars of technology:

Unified Communications and Collaboration - Making customers' people more effective, efficient, and collaborative with UC&C technology. The core focus of this pillar is the high growth Unified Communications as a Service (UCaaS) market segment.

Customer Experience - Helping customers to acquire, delight and retain their customers using customer experience technology. The core focus of this pillar is the high growth Contact Centre as a Service (CCaaS) market segment.

Security & Connectivity - Securely connecting customers' people, partners and guests to their cloud platforms, applications, and data with secure connectivity, and protecting their business from cyber threat. The core focus of this pillar is the high growth Software Defined Wide Area Networking (SD-WAN) and Security Service Edge (SSE) segments.

Maintel combines technology from its strategic, global technology vendor and carrier partners, with its own Intellectual Property, deployed from and managed by its own platforms, to provide seamless solutions that its customers can consume without the need for the internal skillset required to design, deploy and manage the technology themselves.

Maintel serves the whole market, with a particular focus on key verticals of Financial Services, Retail, Public Healthcare, Local Government, Higher Education, Social Housing and Utilities.

Clients include Admiral, Biffa, Christian Aid, Knight Frank, BNP Paribas Personal Finance, Andrew Sykes, Kobalt Music, Alliance Medical, NHS Highland, West Lothian Council, Rapid Response, Lowell, Liverpool City Council, Avon, University College London Hospital Trust, Landsec, and Vanquis Bank amongst hundreds of others.

Its core market constitutes organisations with between 250 and 10,000 employees in the private, public and not-for-profit sectors with headquarters in the UK.

The Equity

There are 14,361,492 shares in issue.

Director Angus McCaffery holds 11.58% of the equity, while other large holders include JDS Booth (24.37%), Harwood Capital (18.89%), JA Spens (17.46%), Herald Investment Trust (5.60%), Elitetel.com (5.00%), Hargreaves Lansdown (3.21%), and Barclays Wealth (3.08%).

Broker’s View

Analysts Andrew Darley and Kimberley Carstens, at Cavendish Capital Markets, are very positive about the group, with a Target Price of 400p for its shares.

For the year to end-December 2024 they estimate that revenues were lower at £97.9m (£101.3m) but with higher adjusted pre-tax profits of £4.8m (£3.9m), earnings of 21.1p (23.5p) per share.

For the current year the analysts look for £101.0m revenues, £5.0m profits, and 24.4p per share of earnings.

My View

I repeat my words of last October in considering that on the basis of the Cavendish Capital Markets analyst’s estimates, this group’s shares, now at 220p, are an absolute steal.

I can see why they have a 400p Price Objective out on the equity, however, in these currently jittery markets I would more cautiously aim for 275p as my new Target Price.

(Profile 03.06.20 @ 173p set a Target Price of 250p*)

(Profile 01.05.25 @ 220p set a Target Price of 275p)

(Asterisk * denotes that Target Price have been achieved since Profile publication)