FPIP

Formpipe Software

Research note

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Formpipe: Positive quarter with strong EBIT margin

Formpipe's Q4 report showed sales of 106.7 mSEK, which was in line with our expectations of 106.5 mSEK . The most positive take away form the report is the EBIT margin which came in at 15.8% compared to our estimate 9.1%. This was driven by the first license revenue of 4mSEK related to the agreement with the City of Stockholm, lower activated development costs, lower sales and other costs than we expected. Furthermore, the board proposes a dividend of SEK 0.3 per share.

Formpipe closed 2016 with a strong quarter showing better margins than we expected. Recurring revenues and cash flow are as usual strong and stable. Our adjusted EBIT margin for the full year was expected at 6.9% but came in at 8.7%. Furthermore, we are pleased to read that the City of Stockholm contract implementation is on track and the first license revenue was recorded in the fourth quarter.  

 

The report did not tell us anything new about the Life Science business, which also reflects in the fact that the segment sales and profitability are still pale.

As usual, we will follow up  with a more detailed research update within the next days. 

 

Until then, you can read up on our previous estimates and research here: http://beta.redeye.se/company/formpipe-software

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