ServicePower Technologies

TICKER: SVR     EXCHANGE: L

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. 
This includes both employees and subcontractors within the repair, maintenance and installation sectors.

LATEST REPORTS

 
Growth set to accelerate in 2016
Published: Dec 14 2015

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. This includes both employees and subcontractors within the repair, maintenance and installation sectors.
Turnarounds are notoriously tricky even at the best of times: inevitably once one problem is fixed, another crops up. Indeed in last Thursday's trading update came news too that SVR's H2 turnover had been impacted - and is now anticipated to come in at £6.2m (-7.8%), or £13m (+2.1%) for 2015. 
This is £0.6m shy of our previous £13.6m estimate, with product revenue growth (strategically higher value) being partly offset by a contraction in professional services. In addition £300k of extra IT spend (relating to one-off cloud transition) was incurred in the period - so we now predict 2015 adjusted PBT of -£1.2m (vs -£0.4m before). The company is still negotiating a number of license deals which may be signed prior to the year end, although prudently we have forecast them to close early 2016.
Going forward, we think that things will improve, and understand from Management that the pipeline is already filling up, especially relating to firm's newly launched mobile proposition (Nexus FS). In fact if they can successfully execute the turnaround, then there is substantial upside for patient investors despite our price target being cut from 11p to 8p/share in line with our lowered estimates.
Compared to software peers, the stock at 3.25p trades on a frugal EV/sales multiple of 0.5x versus the sector average of 2.9x. Plus there is always a chance that an interested trade buyer may come knocking eventually to snap-up this strategic asset.
 
View the Interim Results Webinar
Published: Oct 02 2015

You can now hear Marne Martin, Chief Executive Officer, and Tajinder Sandhu, Chief Financial Officer, present the interim results for ServicePower Technologies plc (AIM: SVR) and address audience questions. 
To view simply click on the video below.
 
Double digit top line growth
Published: Sep 29 2015

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. This includes both employees and subcontractors within the repair, maintenance and installation sectors.
After 18 months of heavy investment in its workforce management software, brands and processes, the firm is now starting to reap the rewards. Today's results for the 6 months ending June 2015 saw like-for-like sales growth of 12.8% to £6.94m. This was on the back of 11 contract wins with new/existing customers, continued product innovation (£0.8m spent on R&D, or 11.5% sales) and partner expansion. 
Encouragingly, 81.5% of H1 turnover was recurring with SaaS now deployed in 71% of customers. This means that H2 visibility is solid, indeed we believe that only about £0.5m of additional revenue (reflecting normal pipeline conversion) needs to be secured in order to meet our 2015 turnover and adjusted EBIT forecasts of £13.6m and -£0.3m, respectively.
Operating in the Enterprise market is still tough with "sales cycles averaging 12 months" - albeit the recent launch by ServicePower of its Nexus FS mobility software should shorten future timeframes, reflecting cutting edge IP and faster cloud based deployments. We believe this functionality could substantially improve the firm's competitive position across the industry, and perhaps even lift its classification from 'Visionary' to 'Leader' within the Gartner's influential Magic Quadrant for Field Service Management.
On a longer term view, ie by 2019, successful execution could mean turnover and operating profits of £19.4m and £2.9m, respectively (with margins at 15%). By which time the stock could potentially command multiples of > 11x EBIT and 2.5x sales. Thus generating a possible valuation range (including £8m of projected net cash) of £40m - £56m, equating to 16.7p - 23.5p per diluted share.
However, for now we reiterate our price target of 11p/share for the next year. Ratings reinforce the scope for upside as the stock at 5p trades on a modest 2015 EV/sales multiple of 0.8x compared to the sector average of 2.8x
NB Management will present at a webinar at 5pm tomorrow, Thurs 1st October. Details to follow. 
 
Upgrade cycle now underway
Published: Jul 16 2015

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. This includes both employees and subcontractors within the repair, maintenance and installation sectors.
Earnings upgrade cycles are like gold-dust for investors and we believe that after this morning's upbeat trading statement this process is now underway for ServicePower.
There is clear evidence of all the previous hard work bearing fruit, as H1'15 sales and adjusted EBITDA came in at £7m (+13% vs £6.2m LY) and -£0.1 (vs -£0.7m LY) respectively. Net cash closed on 30th June at £0.7m after redeeming £0.2m of the £1.3m convertible debt and swapping the rest (£1.1m) into equity.
Encouragingly, 81.5% of H1 revenues were described as "recurring in nature" (eg SaaS, support, operations, etc), thus providing excellent forward visibility and giving us confidence that the company will meet FY expectations. Consequently we have again nudged up our 2015 turnover estimate from £13.4m to £13.6m.
ServicePower shares at 3.65p trade on a paltry 2015 EV/sales multiple of less than 0.6x which is materially less than its software peers. We raise our target share price to 11p from 10p, and that is excluding any potential upside in the event of corporate M&A.  
 
Possible beneficiary of $3.5 trillion M&A boom
Published: Jun 30 2015

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. This includes both employees and subcontractors within the repair, maintenance and installation sectors. 
Ultra-low interest rates and improving corporate balance sheets have helped drive M&A activity to record highs - including in field management software.In July 2014 Oracle snapped up TOA Technologies for an undisclosed sum, while on 30th April private equity house Francisco Partners agreed to buy ClickSoftware (Nasdaq: CKSW) for $438m - equivalent to 3.1x EV/sales.
Hypothetically using the same acquisition multiple as has been agreed for CKSW, then this would imply a take-out price for ServicePower of up to 19p/share. 
Indeed yesterday came the encouraging news that the holders of the above convertible debt have agreed to convert all their existing paper into a mix of new shares at 3.875p (vs 5p option price) and cash. 
Today there was more good news, with the group securing a large contract expansion with a leading global Fire and Security corporation to support 1,000 of its mobile technicians, who install equipment in North America. This follows a strategic partnership signed with Concirrus in May to create one of the first cloud-based 'Internet of Things' solutions for the insurance sector, along with  another landmark agreement with Qton Solutions to provide optimised workforce management services for the utility metering industry.
We suspect that in light of the above positive newsflow that actual growth is stronger than we had previously anticipated. Consequently our revenue forecasts have been lifted to £13.4m (from £13.25m before) for this year, and further increased by 7% in 2016, and 10% pa thereafter.
ServicePower shares at 4p trade on a 2015 EV/sales multiple of only 0.54x - significantly less than its software peers. We reiterate our 10p/share target price, but think there is plenty more upside in the event of a bid approach and/or profit margins migrate towards industry norms (at between 15%-30%). 
 
ServicePower - ED Investor Forum 25th March 2015
Published: Mar 27 2015

Marne Martin, CEO, presents on behalf of ServicePower.
 
2015 has started 'positively'
Published: Mar 25 2015

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. This includes both employees and subcontractors within the repair, maintenance and installation sectors.
Although headline sales declined -9% to £12.7m and adjusted EBIT fell to -£0.9m (vs £0.2m), there were signs of positive momentum, as H2'14 turnover at £6.5m rose sequentially 6% on H1'14 (£6.2m). Plus the large deals which were deferred at the year end are still being actively pursued, and we hope to hear more news in due course. 
With regards to industry recognition, the firm was named as a 'Visionary' by Gartner in the Magic Quadrant for Field Service Management, and also received the M2M Evolution for "Internet of Things" Excellence Award from TMC and Crossfire Media. We view this as anecdotal evidence that ServicePower's competitive position is on an upward path. 
We believe our forecasts are conservatively biased, anticipating turnover to rise 4.1% this year to £13.25m, and then grow 7% in 2016, and 10% pa thereafter. Meaning that by 2019, assuming all goes to plan, the firm should be generating sales and adjusted EBIT of £18.9m and £2.7m (margin 14.2%) respectively.
Using a DCF model with a 14% discount rate and a blend of 2019 multiples (2x sales, 10x EBITDA and 12x EBITA), we maintain our target price of 10p/share. 

ARCHIVE

2015
Secures £750k worth of new business
Published: Feb 03 2015

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. 
Today the company announced that it had signed contracts worth £750k over 3 years with 2 new UK customers. The first being with a provider of warranty claims for manufacturers, distributors and retailers - covering computers, small domestic appliances and brown/white goods, and the other with a leading producer of home appliances.
The firm has already significantly enhanced its technology, branding and prospects, and we believe this will soon flow through into the financials. Furthermore, the company was recently been singled-out by Gartner as one of the few field service providers to have substantially improved its competitive position in the past 12 months. 
The two new deals underpin our current forecasts and 10p/share (DCF derived) target price. Albeit with momentum continuing to build, we hope to upgrade our estimates as the year progresses.
6% sequential sales growth in H2 (vs H1)
Published: Jan 08 2015

In its 2014 year end Trading Update released this morning, ServicePower has said that revenue for the year ended 31 December 2014 is now expected to be £12.7 million (2013: £14 million), below previous expectations. Gross profit is expected to be £5.9 million (2013: £6.6 million) and the net loss is expected to be £0.9 million (2013: profit £0.2 million).
The company has announced more than 17 contract wins in 2014 including both ServiceScheduling and ServiceOperations, capitalising on increased enhancements and internationalisation built into the product platform.
Looking into 2015 the management team is focused on delivering increased recurring revenue, improved operating margins, and delivering product innovations in both its enterprise and cloud product suite.
We believe there is still significant upside with the stock at 5.5p trading on less than a 0.8x EV/sales - materially below the software sector average of 2.5x.
2014
Contract expansion into new territories
Published: Nov 23 2014

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. This includes both employees and subcontractors within the repair, maintenance and installation sectors.
Hot on the heels of a $4.5 million 5 year contract won earlier in the month, the company today announced that it had secured a significant geographical expansion of an existing agreement with a global financial/professional services firm.
We think this major endorsement is another clear sign that the software is generating substantial value for its customers.
This news further underpins our H2'14 turnover and EBITA forecasts of £8.3m (+25% YoY) and £0.85m respectively. Driven by strong repeat business (c. 90% of H1 sales), a doubling of the pipeline and recent contract wins, the stock trades at less than 1x sales and materially below the software sector average of >2x. 
Recording of CEO webinar now available
Published: Nov 14 2014

You can now see and hear the presentation given by CEO, Marne Martin, on 12th November, as well as the ensuing Q&A with investors. 
Simply click on the video below.
The 6th sense in field service
Published: Nov 04 2014

ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals.This includes both employees and subcontractors within the repair, maintenance and installation sectors.
By using ServicePower's resource scheduling software, field professionals can not only boost customer satisfaction by arriving promptly to repair faulty appliances 1st time, but also greatly reduce costs and increase productivity. This is a large untapped market, with c. 7m service technicians in the US alone, of which c. 40% are sub-contractors. 
Interims were in line with FY14 expectations, albeit revenues did decline 15% to £6.2m due to forex headwinds (£ appreciation), the phasing of license wins, and SaaS vs perpetual license deals. Adjusted EBITA came in at -£0.65m. H1 should be viewed in the context of a rebuilding phase - enhancing competitive position and brand awareness, along with upgrading clients and developing specific functionality for new verticals. 
Looking forward, H2 turnover and EBITA is set to climb to £8.3m (+25% YoY) and £0.85m respectively, driven by strong repeat business (c. 90% of H1 sales), a doubling of the pipeline and recent contract wins. This week's $4.5m 5 year extension with a global data management provider, further underpins these estimates. At 7.4p, the stock trades at less than 1x sales and almost 60% below the peer group average. 
Our target share price of 15p is twice the current level and has been derived using a blend of 2017 multiples, discounting back at 12% and amending for net cash of £0.6m.
REMINDER - CEO, Marne Martin will host a webinar with Q&A on Wed 12th Nov, at 4pm. To participate register here:
https://attendee.gotowebinar.com/register/3174428969852145922