Netcompany: High activity and the UK showing its potential - Nordea

Netcompany delivered a Q1 close to company-compiled consensus and solid 13% organic revenue growth, despite the strong Q1 2021. According to the Q1 investor call, Netcompany has a promising order pipeline that includes several larger public Danish projects and several wins achieved so far in Q2. A successful win rate may add to the already higher-than-normal revenue visibility as percentage of full-year revenue (83% in Q1 versus ~75% on average). Employee churn, one of the main concerns in the equity market, is still high (Q1: 17% y/y), but the level seems to be declining (LTM for core: 24%). Our new combined DCF and peer group valuation suggests an unchanged valuation range of DKK 525-610 per share. Marketing material commissioned by Netcompany.

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