The fourth quarter held good news for Precise Biometrics. On 29 November the company announced the acquisition of EastCoast, which offers a visitor management system (primarily to other companies) to access buildings safely and easily. Together with Precise’s solution YOUNiQ, which offers a biometric solution for visits, the company will now be able to offer a full solution to YOUNiQ’s 60+ customers in addition to EastCoast’s ~600 customers. EastCoast had LTM revenues of SEK 16.8m at the time of the acquisition and an EBITDA margin of 17.4%, which will have a great impact on both the top-line and profitability for Precise. EastCoast was integrated by December, however, so the large revenue and profit contribution will be seen in 2022. Moreover, on 29 December, Precise announced that it had signed the two first commercial licensing agreements to provide fingerprint technology in vehicles. The company thus enters a new market, the vehicle segment, which is characterised by longer project cycles and higher royalties than the mobile phone projects that have been Precise’s main focus so far.
We increase sales by 34% for Q4’21e and 21% for FY’22
We estimate that the EastCoast acquisition will contribute SEK 1.4m to sales in Q4’21. Moreover, an up-front payment of SEK 9m for the vehicle licensing agreements will be added to the Q4’21e figures. We slightly lower our organic sales expectations, however, resulting in a total Q4e sales increase of 34%. On the back of the above, we increase our FY’22e sales by 21%, due to EastCoast and increased royalties from the vehicle-contracts.
High volatility in the stock lately
Precise’s share rose ~100% on the news of the vehicle contracts, and the share is up ~16% since 29 November. On our new estimates, Precise is trading at an EV/sales of 3.5-3.1x for ’22e-’23e. Läs mer på Introduce
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