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The Aim 100 2015: 20-11

In the ninth 10-company segment of our analysis of Aim's top 100 companies, we give our verdict on Safecharge International, Summit Germany, Nichols, Young & Co's, Clinigen, Breedon Aggregates, Quindell, Mulberry, Dart and Secure Trust Bank
The Aim 100 2015: 20-11

20. SAFECHARGE INTERNATIONAL

Safecharge International (SCH) is a newcomer to Aim, having listed in April last year at 162p a share. The group – which is two-thirds owned by Israeli billionaire Teddy Sagi, the man behind gambling software group Playtech (PTEC) – provides payment solutions to online gambling companies. Its shares have gained momentum since listing and are now priced at 270p, which leaves them trading on a PE ratio of 22 times forward earnings. However, judging by the group’s full-year figures, it is not hard to see why Safecharge demands a high price.

The company has a track record of strong organic growth, which looks set to continue. Its customer numbers are growing rapidly, which led to a 78 per cent increase in revenue last year. The business is also highly cash generative, with cash flows from operations in 2014 double what they were the previous year. This, along with $122m net proceeds from the IPO, has helped keep the group debt free.

Its cash pile will help the group build on the acquisitions it made last year, namely Irish group 3V Transaction Services and Israeli payment processor CreditGuard. The former acquisition is intended to provide the foundation for the group’s new card services division to become operational during the second half of this year. Analysts at Numis expect sales to grow by more than a quarter this year and EPS to grow by a fifth to 17.3¢. With further potential upside to come from merger and acquisition activity, plus strong organic growth prospects, we think the price tag is easily justified. Buy. EP

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