Archived article

Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

Micro business accounts techy passes first public company test

Freeagent (FREE:AIM) 117.5p

Gain to date: 1.3%

Original entry point: Buy at 116p, 16 February 2017

Considering first half results had been signed-off before FreeAgent’s (FREE:AIM) November 2016 IPO, the second half is the company’s first real test as a public company, and it has impressed.

Both earnings before interest, tax, depreciation and amortisation (EBITDA) losses and cash will be ‘comfortably better than current market expectations’ that were down for a loss of £0.9m and a balance of £3.1m respectively.

GI update FREEAGENT 130417

Even revenue of £8m, said to be ‘in line’ with estimates, look better to us versus the sole £7.6m forecast of N+1 Singer.

What stands out is that costs have been kept in check despite the temptation to ramp spending after raising £8m. That is different to many other AIM IPOs in recent years.

With £8.6m of contracted revenue in the bag for this year (to 31 March 2018), N+1 Singer’s £10.3m estimate looks well within reach. The trajectory for both company and share price looks very positive.

An encouraging start for this exciting growth company. Still a buy. (SF)

‹ Previous2017-04-13Next ›