November 27th, 2019 | 14:50 CET
EQS Group AG - Delays send share price down to two-year low
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Only one third of expected IPOs
The EQS Group achieved sales growth of 2.7% to EUR 26.58 million in the first nine months compared to EUR 25.90 million in the same period of the previous year. However, the sold ARIVA.DE AG was deconsolidated as of July 1, 2019. Adjusted for the subsidiary sold, sales rose by 11.8% to EUR 23.09 million from EUR 20.64 million in the previous year. Nevertheless, this development was below management expectations.
The reason for this low growth was longer development times for the new modules for CRM, Mailing, Policy Manager, which consequently led to shifts in the migration of existing customers and also postponed the acquisition of new customers. In addition, five IPOs resulted in significantly fewer IPOs than the company had previously expected at 15.
Disposal reduces net loss
EBITDA increased from EUR -0.67 million to EUR 0.65 million, although special effects must be taken into account in this development. According to the pro forma consolidated income statement excluding ARIVA.DE AG, EBITDA amounted to EUR 0.39 million compared to EUR -0.63 million, with IFRS 16 effects also having a significant positive impact on EBITDA.
The sale of ARIVA.DE AG generated financial income of EUR 2.23 million, which significantly reduced the net loss for the period. Accordingly, the net result amounted to EUR -0.72 million compared to EUR -2.29 million in the previous year.
Guidance and price target adjustments
The EBITDA guidance was reduced from EUR 2.8 - 3.8 million to EUR 2.3 - 3.3 million. In the course of adjusting the forecast, the analysts of GBC Research now expect EBITDA of EUR 3.30 million in the current financial year 2019, EUR 3.86 million in 2020 and EUR 7.93 million in 2021.
Due to the adjustment of the forecasts, GBC's experts have reduced the price target from EUR 94.00 per share to EUR 90.00 per share, but remain with the Buy rating.
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