Proactis Holdings Plc (LON:PHD) – Capital Network: Entering the Big League

Writen by Ed Stacey

Proactis Holdings Plc (LON:PHD) is a provider of software for Spend Control and eProcurement, systems which are used by most large organisations to manage the way they transact with their supplier base. In recent years Proactis Holdings Plc (LON:PHD) has been gaining market share, within a growing market, delivering a 35% CAGR in revenues, and 62% in EPS.

Firstly we note that higher revenue multiples tend to correspond to higher absolute revenue numbers- companies which have global relevance in the space are rewarded in valuation terms. This supports our view that there is potential re-rating for Proactis now that the company will move above the £50m revenue mark.

Secondly we note that, compared with the two listed peers below, Proactis has a favourable balance of high EBITDA margins (contrasts with Coupa) and strong revenue growth (contrasts with Basware). Again, this supports our view that Proactis could rerate. Summary data for Coupa or Basware can be found on Yahoo Finance or ft.com, for example.


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