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Third party research

Headsent: Looking forward to new possibilities - ABG

Vimab Group

This is a third party research report and does not necessarily reflect our views or values

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Continued operations ahead of forecasts
Positive revisions as a result
Fair value range of SEK 43-59 (73-89)

Headsent reported Q3 sales of SEK 39.6m (35.9m), which was 15% below ABGSCe. However, sales from continued operations (Capacify & Capasearch) of SEK 19.2m (13.3m) were 13% ahead of our forecast. Reported EBIT was SEK 1.7m (5.6m), lower than we expected but again driven by the discontinued operations. In what has been an eventful quarter with the divestment of the Management Consulting business to Knowit, we find it encouraging that the performance in the continued operations was above our forecast. After the quarter closed, Joakim Hörwing was officially appointed as the new CEO, an extraordinary dividend of SEK 30 per share was paid, the company changed name to Headsent, and Commended (in which Headsent owns a 45% stake) secured external financing at a pre-money valuation of SEK 30m (up from SEK 20m in last round).

We lower our fair value range to SEK 43-59 (73-89) to account for the extraordinary dividend paid on 19 October. Our fair value range is based on a ‘22e P/E multiple of 8-12x, Headsent’s stake in Commended, SEK 0-30m in earnouts from Knowit and SEK 77m in distributable cash. We forecast that SEK 72m, or SEK 26.4 per share, will be distributed as an extraordinary dividend next year as the company has stated that the current operation is overcapitalized.
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