Revenues have traditionally been very much on a per project basis, but recently the company has moved increasingly to a Saas basis. This means less revenue up front, but normally a more secure 3 or so year revenue stream.
In 2023 revenue went from £21.1m to £46.1m mainly through acquisition led growth. Infotec provided £19.7m and MultiQ £1.1m. And there were smaller acquisitions in 2022. But this does seem to suggest that there was at least an organic growth rate of double digits. (The company claims 20%, but I think that understates the effect of part year 2022 acquisitions in the full year 2023 numbers).
The acquisitions show the current (newish) management have decided to go boom or bust.
As the company moves to a Saas model, revenues should be less lumpy, but projects are still a major part of the business and a couple of projects can be material.
That said the company is positioned to catch the rising tide of public transport. Net Zero will not happen without a lot more public transport and a reduction in private transport. With a future labour government this is likely to receive even more funds.
The company has £8m in cash (although £2m of that is payments in advance) and is trading cash positive. Profit After tax was £2.9m
It seems likely to me that there will be further acquisitions, but also further growth. There will be a move to Saas, but project work will continue, will be material and will make the results lumpy.
So taking the current market capitalisation of £45m. Take off the free cash of £6m. Gives a valuation of £39m. Give a growth valuation of 15 on PBT of £2.9 = £43.5m. Deduct 10% for lumpy results = £39.2 I hold, but until it further prove itself this seems fairly reasonably valued. Of course changing the metrics could give you a very different valuation.
Always DYOR