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: