In the good old days, you could put your money into a savings account in January, and hey presto, 12 months later the interest earned would be enough to buy the Xmas turkey. Not so today. Faced with such meagre returns, risk tolerant investors are increasingly looking for stocks that are primed for secular breakouts.
Enter Rosslyn Data Tech, a Big Data & spend control software solution provider, focused squarely on the supply chain. Its best-of-breed cloud platform (RAPid) enables corporates to not only significantly reduce costs and improve productivity, but also enhance revenues, optimise supplier performance and comply with regulations. Saving customers literally £ms in the process.
This morning, the company said FY19 sales were up 8.3% to £7.0m vs £6.4m LY - with Annual License Fees climbing 9.2% to £5.4m (£5.0m), and equivalent to 77% of the group. Likewise, cash from operations rose +£329k (-£3.45m LY), reflecting a 75% improvement in EBITDA (excluding SBPs) to -£432k (-£1.8m), alongside lower opex, which came in at £6.0m (£6.7m) despite absorbing £0.9m of R&D (12.9% sales).
Going forward, thanks to higher future investment in sales & marketing and a promising pipeline, we reckon turnover will jump 15% LFL in FY20 to £8.0m. In turn, driving EBITDA (pre SBPs) above breakeven this year, with Rosslyn becoming self-funded towards the end of FY21.
Indeed with Rosslyn signing numerous contracts last year (eg KLM, Diageo, BAe Systems) across various sectors, including International Logistics, Civil Defence, Healthcare and Pharma we think the firm is perfectly poised for a major break-through over the next 2 years.
