Megabuyte, a leading market intelligence service, has initiated coverage of niu in an article by principle analyst, Philip Carse, entitled: A new beginning for niu Solutions.
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Megabuyte: ‘A new beginning for niu Solutions’
17:00 | 18.07.2011
Megabuyte, a leading market intelligence service, has initiated coverage of niu in an article by principle analyst, Philip Carse, entitled: A new beginning for niu Solutions.
In his summary he states that niu Solutions’ financial position was significantly improved with the April sale of half of its business to Daisy (see here for megabuytes Daisy investment notes). According to CEO Gary Woodward, the remaining business is nicely profitable, focused on larger customers, and the company is once again contemplating M&A.
Here’s an overview of his analysis:
Daisy essentially took the mass market business, in the process beefing up its data capabilities, whilst niu was left with a portfolio of much larger customers. A key element of its business is providing communications services for managed business centres (which from our own experience must be highly profitable for landlords!). The company also undertakes substantial multi-site projects; for example it has provided all of the underlying IT and comms services, networks and hardware for the new UK retail bank, Metro Bank.
According to CEO Gary Woodward, for 2011, niu is targeting revenues and EBITDA of c£26m and £4.3m, with 80% of revenues recurring. niu now has gross debt of just over £30m, but only £3m of this is ‘real’ debt, the rest being quasi equity. With life settling down after the Daisy disposal, Woodward is now turning his attentions to M&A, noting that in today’s world, companies either need to eat or be eaten. He is pursuing acquisitions that will either bring scale or capabilities in areas such as applications and security/compliance. The company has the continued support of its main backers and could also call on new third party backers according to Woodward.
In his conclusion, Carse states that the new niu is in much better shape, with a much more focused, larger customer business well positioned for the growing move to the Cloud and a lower debt burden (albeit still substantial relative to profits), providing the grounds for both organic and M&A-led growth.
This article has been reproduced in part with permission from the Megabuyte Company Intelligence service and was originally published on 1 July 2011.For more details, please visit www.megabuyte.com.
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