Double thumbs up for new bank facility

Refinancing loans can be a tricky exercise at the best of times, especially given today’s the political impasse at Westminster. Therefore, it was very encouraging to hear this morning that Rosslyn Data Tech had managed to replace its existing £0.75m debt with a new 3 year, £1.5m secured facility from Clydesdale Bank on equivalent terms (ie interest charged to be at 7.75% plus 3 month LIBOR). 

We think this is both a positive step forward to accelerate growth and a major endorsement of RDT’s future prospects. Particularly since the company should shortly become cashflow positive, and continues to win blue chip clients (eg KLM, Diageo, BAe Systems, etc), who benefit from its proprietary big data, analytics and AI platform (RAPid). 

 

In terms of the numbers, we have held our estimates, reiterate RDT’s 12.5p/share valuation and look forward to the pre-close trading update in May. What’s more, given the rebound in Big Data stocks during the past 3 months, the firm continues to look materially undervalued on a relative and absolute basis.