Data deletion equals added profit for Blancco

Once you fight through the thicket of buzzwords that surround the actual details of Blancco Technology’s (BLTG) operations – largely about it accelerating the “transition to the circular economy” – it turns out there is plenty of substance to these claims. 

The company sells software which companies or ‘IT asset disposition’ (ITAD) firms can delete data and files from computers remotely. This was a hot business last year as companies realised they didn’t need to hold on to thousands of old computers – therefore boosting sales to ITAD companies that accepted this electronic waste – while home working meant workers had to use home and public networks to access potentially sensitive corporate information. Blancco’s work leads to more computers being recycled and less energy usage from old files and data being stored. 

The company’s half-year results, covering the six months to 31 December, show plenty of demand for data deletion, as its ITAD division saw a one-third sales bump compared with the year before to £6.9mn. The enterprise division saw an 11 per cent rise to £7.1mn. Operating profit more than doubled on 2020 to £1.9mn. 

Chief executive Matt Jones said the post-lockdown demand build-up was a “one-off” but “increasing pressure on companies to act in an environmentally sustainable way” would keep driving growth. 

Peel Hunt sees profits and profitability improving in the full-year numbers, with a forecast for 2022 Ebitda at £11.1mn, a one-third increase on 2021, on a forecast sales increase of 10 per cent to £40mn. 

Blancco’s strong position in this niche within the broader corporate IT space is impressive, but we are unsure whether momentum will continue once companies settle in to this hybrid working model. Hold. 

Last IC View: Hold, 285p, 28 Sep 2021