StrongPoint reported Q4 revenues of NOK 284m, -2% y-o-y (in Retail Technology) and 45% q-o-q. While it is still negatively impacted by components shortages and negative FX development, sales are now very much back in business following the Q3 low. In particular, Payment Solutions (CashGuard) had an all-time high product revenue (+89% y-o-y), driven by both Norway (the NG contract) and Spain/Partners. The gross margin in Q4 was 44.2%, strongly up from 37.9% in Q4 last year (continued ops). EBITDA was at NOK 20.0m (7.1% margin), up 1% y-o-y and up 52% q-o-q. Going forward, the component shortage situation is still uncertain (further delays expected if it does not improve), but the company has been proactive and increased inventory to mitigate the situation. Several CashGuard deliveries is said to have been pushed into 2022, i.e., this represents postponements of revenues rather than customers not placing orders.
Acquisition of Air Link to broaden footprint
StrongPoint announced yesterday that it has signed an agreement to acquire Air Link Systems (ALS), a UK based company that provides installation and service for retail solutions (grocery lockers, self-checkout, vending systems, queue management systems, etc.). ALS is said to have ~NOK 240m in revenues and ~NOK 24m EBITDA (10% margin). The settlement will be 80% cash (covered by available funds), and 20% in consideration shares with 24-month lock-up. In our view, this acquisition looks to broaden the company’s footprint, in line with its 2025 strategy.
Strategic update: reiterating 2025 ambitions
The company is also holding a strategic update today. Based on the released presentation material, we highlight that StrongPoint is reiterating its 2025 financial ambitions: revenues of NOK 2.5bn and 13-15% EBITDA margins, i.e., ~NOK 325-375m in EBITDA. Based on the current pricing of the
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