Edison Investment Research Limited
London, UK, 25 November 2022
Claranova (CLA): Mixed performance in FY22
After several years of rapid growth, Claranova reported flat revenue in FY22. This reflected a post COVID-19 slowdown and a tougher customer acquisition environment for PlanetArt, offset by organic growth in Avanquest and myDevices. We reduce our revenue and EBITDA forecasts to reflect a slower recovery in growth for PlanetArt and a higher group cost base exiting H222. Claranova continues to trade at a substantial discount to its peers – solving the customer acquisition challenge in PlanetArt in a cost-effective manner in our view will be an important step to reducing this discount.
Reflecting the different business models for each division, we continue to use a sum-of-the-parts approach to valuation. Using EV/sales multiples that reflect our views on divisional growth and profitability, and are conservative compared to the peer group averages, and reflecting lowered forecasts for FY23, we reduce our valuation from €7.85 to €7.39 per share. In our view, consistent growth in revenues and margins towards the company’s FY24 targets will be key to reducing the discount to peers. In the near term, resumption of growth in PlanetArt (while balancing profitability) will be the key trigger.
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