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Warsaw Stock Exchange - Sygnity: Final Results for Q1 2022/23

Warsaw Stock Exchange - Sygnity: Final Results for Q1 2022/23 | FXMAG.COM
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Recommendation: sell | target price: PLN 13.70 | current price: PLN 25.80

SGN PW; SGN.WA | IT, Poland

Sygnity’s final results for the first quarter of fiscal year FY2022/23 (calendar Q4 of 2022) came in line with the preliminary figures published on Tuesday. The quarterly revenue came 10% ahead of our estimate after rebounding 14% from the same period a year earlier – a pace of growth that marked a significant acceleration relative to the average achieved in FY2021/22 (+3.7% y/y). Sygnity attributes the increase in topline growth to successful public tenders. The fiscal first-quarter profits exceeded our expectations by a substantial margin, and it is unclear at this juncture whether the strong growth can be sustained in the future.

  • The consolidated Q1’22/23 revenue amounted to PLN 61.9m, representing an increase of 14% from the corresponding year-ago quarter.
  • Of this, revenue from implementation services registered PLN 41.4m vs. PLN 34.4m a year earlier.
  • Sygnity said in the earnings release that it had entered into a maintenance contract with the Ministry of Family and Social Policy in December 2022 for the "POMOST Std" social services software. The contract term is 1 January 2023 through December 2023, and the total fees are estimated at PLN 10.3m.
  • In our view, which we intend to confirm with the Company, Sygnity may have booked a major portion of these fees in the financial statements for 1Q 2022/23.
  • Gross profit came in at PLN 23.6m in 1Q’22/23, and the gross margin amounted to 38.1% (we had forecast 29.0%).
  • SG&A expenses fulfilled our expectations at PLN 9.9m.
  • Other operating activity resulted in a quarterly net gain of PLN 0.2m.
  • EBITDA came in at PLN 16.2m.
  • Net profit stood at PLN 10.7m after increasing from PLN 6.0m in the same quarter the year before.
  • Sygnity in its earnings report highlighted having secured several business-critical contracts during 1Q’22/23 that helped to turn the tide after a period of slow sales in selected areas of the market.

warsaw stock exchange sygnity final results for q1 2022 23 grafika numer 1warsaw stock exchange sygnity final results for q1 2022 23 grafika numer 1

Analyst: Pawel Szpigiel +48 509 603 258

GPW’s Analytical Coverage Support Programme 3.0

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GPW’s Analytical Coverage Support Programme 3.0

GPW’s Analytical Coverage Support Programme 3.0

The Warsaw Stock Exchange's (GPW's) Analytical Coverage Support Programme 3.0 supports investment firms in drafting analytical reports which are financed by GPW. The objective of the Programme is to improve the availability of research covering less liquid companies, facilitating investors' informed investment decisions based on a reliable independent source of issuer information. Eligible to participate in the Programme are companies listed on the GPW Main Market (other than WIG20 participants) and on NewConnect. The Programme covers up to 50 issuers.

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