Administer - Work to be done

H2 fairly in line with expectations
Administer reported H2 figures which were fairly in line with our expectations. Revenue grew 27% y/y to EUR 36.6m (Evli EUR 37.1m), clearly boosted by the acquisition of Econia. EBITDA amounted to EUR 1.3m (Evli EUR 1.1m). The guidance for 2024 is on the softer side, with revenue estimated to be EUR 76-81m (growth ~0-7% y/y) and the EBITDA-margin to be 6-9%, with the guidance mid-point below our pre-H2 estimates. Administer’s BoD as expected proposed that no dividend be paid.

Turnaround but pace a worry
We have lowered our 2024 revenue and EBITDA-% estimates slightly to EUR 77.1m (80.4m) and 7.4% (7.9%), with our coming year estimates also lowered due to a perceived slowness in the potential scaling of growth and profitability. The strategy update was more on the “nice to know” side but the coming transition to quarterly reporting and as such increased transparency was welcome. The new financial targets, to be achieved by 2026 (revenue EUR 100m and 15% EBITDA-%), are clearly more reasonable. On our estimates the required growth during 2025-2026 (~14% p.a.) is doable but tough. Recent years’ organic growth track and challenging market situation provides limited support and the strained financial situation (covenants not fulfilled, net debt/EBITDA ~4x) and low share price limit’s inorganic growth potential. In terms of profitability we continue to see good potential to reach over 10% EBITDA-% in the coming years but the H2 result presentation in our view did not provide a clear vision for how to double the margin by 2026 (based on 2024 guidance mid-point). 

BUY with a target price of EUR 2.6 (3.0)
On our revised estimates we lower our TP to EUR 2.6 (3.0) and retain our BUY-rating. Despite near-term challenges, the case remains attractive on valuation levels and turnaround potential.