27th Jun 2022 18:15
(Alliance News) - Shares in Big Technologies PLC rose on Monday after German bank Berenberg started the monitoring technology firm with a 'buy' recommendation.
Big Technologies began trading on London's AIM market in July last year, at a price of 200.00 pence per share. Shares closed up 7.4% at 260.00p in London on Monday, 30% above its IPO price, giving it a market capitalisation of GBP753.9 million.
Berenberg called the company a "disrupter" which is winning market share in the electronic monitoring market in the criminal justice sector - an industry which is worth USD1.1 billion and growing at a "high" single-digit rate.
"The group has been taking market share from incumbents that operate on legacy technology by winning long-term government contracts, providing high revenue visibility. Also, Big's good pricing power and its less price-sensitive customer base make it a good asset to own during inflationary cycles," said Berenberg.
Big Technologies reported revenue of GBP13.9 million in the four months through to April, an increase of 18% year-on-year. Monthly recurring revenue in April was GBP3.9 million. Further, the company said it has worked to overcome supply chain challenges by increasing levels of inventory.
The company at that time said it expected to perform in line with the current market forecasts of adjusted earnings before interest, taxes, depreciation, and amortisation of GBP25.0 million to GBP25.5 million.
"Big can outperform our estimates if it were to win more of the significant contracts that are coming up for tender in the UK and Europe. Given Big's recent relationship with its customers and its growing stature, we think this is likely," said Berenberg.
This makes the stock look "quite attractive", the broker said as it initiated with a 'buy' rating and 320p price target.
By Lucy Heming; [email protected]
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