Research note


Talkpool: Q4 preview, first quarter with LCC

Talkpool will publish their Q4 report on Wednesday, the 28th of March. We expect a strong revenue growth and sales of approximately EUR 6.18m. The revenue growth is expected to be driven by the acquisition of LCC, which will add an additional EUR 1.70m in sales. We expect Talkpool to report EBITDA around EUR 0.40m.

We expect that Talkpool will report a strong sales growth and gross margin (23 %) due to that two months of LCC are included in the fourth quarter results. We forecast that Talkpool will report a revenue of EUR 6.18m, which corresponds to a sales growth of 71 % (23 % organic growth). Regarding earnings, we expect EBITDA of EUR 0.40m, mainly driven by increased sales in the Benelux as well as in the Middle East area.  

We find it to be highest of importance that the acquisition of LCC will start to bear fruit. A successful integration of LCC would imply that Talkpool could focus on growth rather than focusing on the internal organization. If we would see a successful integration of LCC, hence, higher EBITDA margin, we will evaluate to increase our sales estimates. Due to these reasons we would like to see Talkpool elaborate more on how the integration of LCC has gone, but also what we can expect of LCC going forward.

In the last quarter (Q3’17) Talkpool reported that sales of Mauritius turned out a lot lower than expected, which was due to a delay in a fiber project for Huawei. It is not the first time Talkpool has shown difficulties in their operations in the African region, which we comment in our update. We wrote in our update that we think that Talkpool should establish focus regions, and where we considered that leaving the African region would have a positive outcome. Also, some clarification regarding the recent Blockchain investment would be appreciated.

Lately, there has been a lot of buzz in the area of IoT and therefore we want Talkpool to comment about their view of the staggering interest in IoT and their road to commercial success.

The Q4 report will be published Wednesday the 28th of March. We will get back with a comment following the release of the report.

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