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  • Writer's pictureMark Watson-Mitchell

Maintel Holdings – Will Results Delay Bring Any Surprises?

In the last year or two this £35m capitalised group has been facing some uphill struggles and the 2023 Final Results, which were due to be announced tomorrow, have been delayed.

The questions in the market are just what could have changed since the end January Trading Update?

The Business

Founded in 1991, Maintel (LON:MAI) floated on the AIM market in 2004 and has subsequently grown both organically and through strategic acquisition.

Today the company is leading provider of cloud, network and security managed communications services, with almost 600 staff operating from five UK office locations, from where they service customers globally, through both direct relationships and via strategic partners. 

It is a fast-growing provider of such services for the private and public sectors, securely connecting with its customers in the office, on the move and in the cloud to companies nationwide and internationally.

The group’s core expertise encompasses unified communications, contact centre solutions, workforce optimisation, networking and security, mobile and connectivity services.

Recent Trading Update

It is apparent that the company made significant progress in profit generation and working capital management during the last year.

It has embedded margin improvements in 2023, delivered cost structure improvements and continues its focus on streamlining operations, evolving the market and product strategy, which underpins its sustainable future profitability.

The company has declared that its next generation products and services continue to be the investment focus, along with exploring the role of new technology and customer service delivery.

Converting its solid pipeline of opportunities in both the public and private sectors and with a leaner organisation, the Board is confident that the company starts the new financial year with solid foundations to deliver revenue, profitability and cash generation in line with market expectations.

CEO Carol Thompson stated that:

"2023 has been a challenging year, following on from 3 previous challenging years; as such to have the Maintel team support, deliver and build on the changes in focus, operational and cost effectiveness, is an outcome one can only have hoped for when we started on this journey.

The team are positive, energised and keen to engage with clients, both existing and new. 

Post pandemic the rate of technological change in our markets is significant, with changes in business working practices and how and where they use and locate their resources.

This is both exciting and challenging; but change is where opportunity lies, and we intend to be part of that new generation of service to clients.”

Results Delayed to Wednesday 1st May

The date of the final results has been slightly delayed due to increased audit work driven by regulatory changes and temporary resource constraints.

However, we now know that the group is on the road to recovery, last week it guided that it still expects to report revenues amounting to £101.3m and adjusted EBITDA of £9.1m for 2023, driven largely by an acceleration in trading momentum during that year.

Broker’s View

Analysts Andrew Darley and Kimberley Carstens at Cavendish Capital Markets have estimates for the year to end December 2023 for £101.0m (£91.0m) revenues, with adjusted pre-tax profits of £4.7m (£0.0m), with earnings coming in at around 26.6p (loss 6.4p) per share.

For the current year they go for £103.0m sales, £7.2m profits and 32.9p in earnings per share.

The year to end December 2025, sees the analysts pencilling in £108.0m turnover, £9.3m profits and 41.1p in earnings.

They have a Price Objective of 400p on the shares.

Shares In Issue

There are some 14.36m shares in issue.

Directors hold around 25% of the equity, with John Booth owning 3.5m shares (24.37%).

Other holders of significance include Harwood Capital (18.39%), JA Spens (16.20%), AJ McCaffery (11.97%), Herald Investment Trust (5.60%), (5.00)%), Hargreaves Lansdown (3.21%) and Barclays Wealth (3.08%).

My View – Heading To 325p

I don’t see any reason for concern in the delay of the results, the group is not unlike a host of other PLC’s suffering late ‘signing-off’ of corporate statements.

On the basis of the Cavendish analysis, this group’s shares are undervalued, in my opinion.

They touched 269.90p two weeks ago, before easing back to the current 245p, at which level they would be trading on just over 9 times historic and a mere 7.45 times current year earnings.

I believe that positive news on Wednesday of next week could prove to be a progressive platform from which they will rise to over 325p in the short term.



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