 Cavendish
Journeo has released a positive FY24E trading update, which shows Adj PBT ahead of expectations at £5m (£4.8m forecast). Revenues increased 4% YoY to £50m (FY23A: £46m) driven by growth across the Group. Adj PBT increased by over 20% to £5m (FY23A: £4m); which we put down to improving gross margins across segments and greater scale in the business following a full year contribution from MultiQ, acquired in 2H23A. Journeo’s business is set to benefit from long-term government spending trends in the transport sector to help reduce emissions by improving the quality and quantity of public transport journeys. There are a number of multi-billion-pound government projects which Journeo is able to tap into to expedite the growth of the business, most recently the £1bn bus funding plan announced by the Labour government. We are encouraged by recent contract wins showing a continuation of momentum, such as the £1.7m RATP bus safety systems purchase order in November, and the £1.5m 4-year Passenger Information contract extension with City of Edinburgh Council in December. This allows us to confidently raise our FY25E Adj PBT by 4% to £5.2m. Journeo looks highly compelling on an FY25E Adj P/E of 11.7x (8.7x ex-cash) vs peers on 15.7x, with further upside being seen if cash balances are deployed on additional organic or acquisition opportunities leading to earnings accretion. |
~ 11x earnings
~ a profit upgrade for 2025 less than 1 month ago only a few weeks into the year
~ £47 million market cap
~ £16m of cash ex leases at the end of 2025 forecast |
Good chance st tips this in his bargain shares if its out tomorrow |
Great write up in this substack I missed |
LinkedIn from the past few days
"The Journeo Portal, our intelligent transport platform, continues to grow!
🚌 13,000+ transport assets managed
👩8187; By more than 1,000 users"
And one of the sales reps
"Assets that are producing many times more thousands of data points that enable our customers to run faster, better, more efficient, more connected, more cohesive, more intelligent transport services.
I've been blown away by the demos the team have given in terms of the capability and ease of use and i'm excited about where we are going.
A device agnostic management and reporting platform that takes the info from your widgets and puts them in a place that makes sense to you in a format you can understand."
Eric |
JNEO only have 14.47m shares outstanding, if JNEO keep posting positive performance figures in the future IMHO the share price should keep rising. |
Yes, another nice order. |
RNS - £1.1m order. |
If you take the comments from Russ at the last presentation at face value then we're looking at 1 or 2 bolt-ons financed from internal resources early in 2025, followed by potentially something more substantial (requiring a placing) later in the year. |
Totally agree, Adam. The fact they were willing to upgrade in January, and also talked to strong order intake (which is a revenue figure, while Cavendish upped on profit margin), is a significant positive if you read between the lines. Hence my surprise the market did not cotton on and re-rate the stock. But therein lies the window of opportunity for me.
I am very happy for the Cavendish forecasts to be set conservatively. If you listen to Russ on the last IMC, he still talks about maybe getting towards broadly £75m of revenues organically over the next 2-3 years... That would require a very large organic growth CAGR. Nobody is baking that in, but if they even get only a third of the way there, that spells large upside to the Cavendish consensus
Eric |
Yes, I would much rather invest in a company which is understated with its guidance. Let investors take an excited view or not - the last thing I want is profit warnings |
Good point there Adam - nice start to the year. I for one am happy for mangement here to be pretty conservative. With the lumpy nature of their work too that makes all then more sense - it really gets my goat up that some companies over promise under deliver and make up sketchy excuses as to why they didnt hit targets. To be fair to a company like Journeo it must be tricky for them at start of the year to know how it will all pan out. |
Eric
I dont think that's unrealistic at all.
One other point about the TU last week: they mentioned that FY25 PBT would be slightly ahead of expectations. If they *genuinely* thought it would be 'slightly' ahead of expectations as they state, then they wouldnt say it now given that its January. They also wouldnt have visibility in January that it would only be 'slightly' ahead.
That tells me that their view is that PBT will be materially ahead, though perhaps with some risk and hence only saying slightly rather than materially ahead.
Adam |
interestingly on stokopedia the company qualifies for 5 long screens (plus 1 short !)
T Rowe price screen
Peter Lynch Growth Screen
Philip Fisher Growth Screen
Greeblatt's Magic Forumla
and their very own screen of screens
the short one being the Benish M-score Screen - thats probably a result of the jump in profits that can flag up on soemof those screens as being a red flag - that may seem odd but thats how some of those screens work - i would expect that screen to tail off with future consistent financials that evidence that earnings are truly sustainable
Perhaps tehn fisrt 3 screens listed all have very similar tests - but thats some fairly respected names wher at presnet the tick box is a yes.
I guess the lumpy sales that need contracts to be signed and then fact its more physical items rather than saas at present expoalin lack of premium rating here. In that regard as a fairly new owner (last 6 mon ths or so) - i have been happy here that mangement seem safe pair of hands. Some posters were speculating they would struggle with tail off of us subway contract for example - that doesnt seem to have happened so well done if they have repalced one off single lump contract wih more reliable ongoing other items.
Even if saas revenue is low % i get the feeling that their tech is deeply ingrained in everything they do so that in itself will hpefully make stuff sticky ? not sure how accurate that assumption is - do this still sell bog stand stuff without the added value ongoing soaftware/updates being necessary?.
They certainly seem to have enough fingers in enough pies and decent base level of sales now that hopefully they are well placed to prosper. |
Some very quick maths.
£47m market cap, £16m of net cash at FY25 end.
If they spend £10m of that net cash pile on an acquisition at approx 11x P/E in the private markets (and with a 25% tax rate), it's pretty simple to get towards 31p of adjusted EPS.
If that happens, and I think they will be doing M&A this year, the stock can quite easily be closer to 400p, so very decent upside versus today's levels.
Eric |
I've been buying after the trading update. I was a bit concerned over how FY25 would play out because it's a bit difficult to model but the confidence with which Russ has already upgraded FY25, and we're only in January is significantly reassuring to me. I am actually quite surprised the market has not put a higher multiple on this after the trading update and pushed the stock above 300p. As and when they deploy the cash which is more than 25% of the market cap... I think that will be a major catalyst for the stock, and it would not surprise me if we hear something around this within the next few months.
<12x P/E, with >25% of the market cap in cash, and now a derisked FY25. I suspect we will be looking at forward EPS moving to 30p+ before too long (compared to 24.9p for this year currently), which would start to justify closer to 400p.
Eric |
4*
Journeo plc, a leading provider of information systems and technical services to transport operators and local authorities issued an upbeat update on trading for the year ending 31 December 2024. The Group expects to report revenues for FY2024 of £50m (2023: £46m), in line with market expectations and adjusted profit before tax of £5.0m (2023: £4.0m), slightly ahead of market expectations. The Group has continued to see strong momentum in both Fleet Systems and Passenger Systems. Infotec and MultiQ, which were...from WealthOracle
wealthoracle.co.uk/detailed-result-full/JNEO/1142 |
Feels like there is risk to the upside and i am expecting a larger earnings beat this year before adding accretive bolt-ons. Plenty more upside here imo and one of the few sectors with macro tailwinds. |
Good update today, onward and upward. |
Back through the 300p level hopefully it will push on to the 350p level this time.
Expecting more contract wins and an excellent set of figures for 2024 plus as stated in the Company meets Investor presentation they have targeted 2 bolt on acquisitions which they hope to get over the line in first quarter 2025. |
Yes nice contract win, we can only hope that other Councils will get on board. |
Positive article in 'Investor's Chronicle' this week |
Finally cleared Surely it must have been a larger overhang than the 20,000 sold earlier today |
Must be an overhang here ? Nett buys must be around 100k shares positive the last 3 or 4 sessions |
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