Administer - Steady performance expected
Administer is set to report Q3 results on November 5. We expect stable performance in line with H1 trends, with limited organic growth. Looking ahead, the Sarastia acquisitions remain a key catalyst for growth and earnings expansion.
Q3 expected to mirror H1 trends
We forecast Q3 net sales of EUR 17.7m (+0.6% y/y), reflecting subdued market conditions and limited organic growth. Inorganic contribution from minor accounting acquisitions is expected to be marginal. Within the business areas, we expect payroll services provider Silta and Administer’s accounting operations to post modest growth of some 2% y/y, while software provider EmCe is projected to have grown 6% y/y, continuing its strong momentum from H1. Personnel specialist Econia is likely to remain under pressure, with sales estimated to decline 6% y/y due to persistent weakness in the staffing market. We estimate Q3 EBITDA at EUR 1.1m and EBITA at EUR 0.7m, both slightly above last year’s levels. Cost-saving measures announced in Q2 are not expected to materially impact Q3, and with an already lean cost base, further near-term efficiency gains appear limited.
Sarastia acquisitions offer much needed growth potential
Administer’s FY guidance stands at EUR 72–78m in revenue and an EBITDA margin of 7–10%, with our estimates near the midpoint. The company has indicated that it will update its outlook once the Sarastia acquisitions are finalized, likely by year-end. The businesses to be acquired, serving municipal and wellbeing services county customers, are expected to generate some EUR 58m in revenue and EUR 1.3m in EBITDA in 2025. The integration of these businesses would lift Administer’s net sales by some 80% on an annual basis. While attractively priced (P/Sales 0.15x, EV/EBITDA 7x for 2025E) and strategically sound, execution risks, turnaround progress, and potential customer churn remain key considerations.
BUY with a TP of EUR 2.9
Administer is currently valued at 11x–8x adj. P/E on our 2025–26E estimates, which we consider rather attractive given the company’s stabilized profitability in a challenging market and its long-term potential. While the Sarastia acquisitions represent a significant new opportunity, they also introduce risks related to integration and customer churn.