Administer |

Technology driven provider of financial management services 
| Finland

Financial overview

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Administer - Time to accelerate growth

01.04.2022 | Company update

Administer reported H2 results and a gave a guidance that were well in line with our expectations and we as such see no need to revise our estimates or views. We retain our TP of EUR 4.7 and BUY-rating.

H2 well in line with expectations
Administer reported H2 results well in line with expectations. Revenue grew 3.2% y/y to EUR 22.0m (Evli EUR 22.1m) driven by the acquisition of EmCe. EBITDA and EBIT amounted to EUR 1.7m and EUR 0.3m respectively (Evli EUR 1.6m/0.4m). Profitability was affected by the company’s investments into growth and technological development. With the net result affected by IPO related expenses and as such being clearly negative, the BoD proposed that no dividends be paid for FY 2021 (Evli EUR 0.00).

Seeking to clearly pick up growth
Administer reiterated the earlier communicated outlook for 2022, expecting revenue to grow to over EUR 51m and to achieve and EBITDA-margin of at least 8%. With the H2 results and the guidance corresponding to our expectations, along with no significant changes to our views on Administer’s potential, we make no notable changes to our estimates. We expect 2022 revenue of EUR 52.1m and an EBITDA-margin of 9.2%. Current estimate uncertainty mainly stems from growth expected to be driven by acquisitions, with Administer seeing 5-10 acquisitions being made during 2022. Near-term profitability improvements should mainly arise from a lesser impact of challenges faced during 2021, with expectations of measures to improve operational efficiency and synergies from acquisitions to start to show from 2023 onwards.

BUY-rating with a target price of EUR 4.7
With our views and estimates essentially intact we retain our BUY-rating and target price of EUR 4.7. On our estimates current valuation implies a 2022e EV/sales of 0.7x, which in our view does not account for the improvement potential, albeit we acknowledge that Administer has yet to prove its worth.

Administer - Figures as expected

31.03.2022 | Earnings Flash

Administer’s H2 figures were well in line with our expectations, with revenue of EUR 22.0m (Evli EUR 22.1m) and EBITA of EUR 1.3m (Evli EUR 1.3m). Administer expects revenue in 2022 to grow to at least EUR 51m and an EBITDA-margin of at least 8%. The BoD proposes that no dividend be paid for FY 2021 (Evli EUR 0.00).

  • Net sales in H2 amounted to EUR 22.0m (EUR 21.3m in H2/20), in line with our estimates (Evli EUR 22.1m). Net sales in H2 grew 3.2% y/y. Growth was mainly attributable to the acquisition of EmCe.
  • EBITDA and EBITA in H2 were EUR 1.7m (H2/20: EUR 2.9m) and EUR 1.3m (H2/20: EUR 2.6m) respectively, in line with our estimates (Evli EUR 1.6m/1.3m). The EBITA-margin amounted to 5.9%. Profitability was burdened by growth investments.
  • Operating profit in H2 amounted to EUR 0.3m (EUR 2.2m in H2/20), in line with our estimates (Evli EUR 0.4m).
  • During H2 Administer completed the acquisition of financial management software producer EmCe Solution Partner Oy and accounting firm Tilikamut Oy and its subsidiary Konnektor Oy. Administer has during Q1 announced two acquisitions, WaBuCo Financial Services Oy (2021 revenue EUR 0.9m) and the payroll services of Konjunktuuri Oy.
  • Guidance for 2022: Administer expects that its net sales will increase to at least EUR 51m and the EBITDA-margin to be at least 8%. The company further expects to make 5-10 acquisitions over the course of 2022.
  • Dividend proposal: Administer’s BoD proposes that no dividend be paid for FY 2021 (Evli EUR 0.00).

Administer - Initiate coverage with buy-rating

04.03.2022 | Company report

Administer is one of the leading providers of financial management by revenue and HR & payroll services by number of pay slips in Finland seeking rapid growth and clear profitability improvements supported by M&A activity.

Seeking rapid and profitable M&A supported growth
Administer is one of the leading providers of financial management and HR & payroll services in Finland. Founded in 1985, the company has grown rapidly in recent years through acquisitions and today employs around 600 employees. Administer is in its strategy seeking to continue growth inorganically as well as boosting organic sales growth through investments into its sales organization and looking to clearly improve its profitability through growth, synergies from acquired companies and through enhancing the efficiency of own operations. The company targets revenue of EUR 84m and an EBITDA-margin of at least 24% in 2024.

Set to return to rapid growth in 2022
Administer’s recent financial performance has been affected by the pandemic, a loss of several larger customers in its subsidiary Adner and growth investments and reported figures have so far during 2021 declined y/y. A clear pick-up in growth is seen in 2022, aided by the acquisition of financial administration SaaS solutions provider EmCe, with profitability also set to recover with a reduction in the impact of previously noted challenges. The company’s growth and profitability potential is in our view considerable but the potential realization is still a long way away.

Initiate coverage with buy-rating and TP of EUR 4.7
We initiate coverage of Administer with a target price of EUR 4.7 and BUY-rating. In deriving our target price for Administer we rely mainly on peer multiples and further compile a scenario analysis to illustrate the impact the company’s financial targets, should they materialize, could have on the value. Our target price values Administer at 1.2x 2022e EV/sales and 16.6x 2022e EV/EBITA, near the lower end of peer multiples, which we currently consider fair as Administer’s financial performance is still quite clearly sub-par.

Annual and sustainability reports

25.04.2022

Annual report 2021

Company news

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Company Facts

Guidance

Administer expects that in 2022 it will reach a revenue of EUR 47-49m and achieve an EBITDA margin of 5-7%

Financial targets

Financial targets 2024: Revenue of EUR 84 and and EBITDA-margin of 24%

Share price (EUR)


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