ITIM Group (LON:ITIM), a leading provider of disruptive SaaS and services platforms for store-based retailers, has announced a significant five-year contract with Assai Atacadista, Brazil’s largest wholesaler, boasting over 300 stores. This new contract will see Assai Atacadista utilise ITIM’s ‘UNIFY Price and Promotion Optimisation’ solution to enhance its pricing strategies and promotional activities.
John Cummins, analyst at WH Ireland, highlighted the significance of this deal, stating, “Given Assai’s scale, we view ITIM’s selection as a data and analytics solution provider as a meaningful endorsement of the quality of ITIM’s product suite, which bodes well for the group’s ability to win further new customers in the near term.”
Recent Contract Wins and Financial Outlook
The contract with Assai Atacadista is part of a series of recent wins for ITIM Group, which also includes a notable new contract with Quiz Clothing in the fashion retail market, an extension with The Entertainer, and a five-year renewal with Majestic Wine. These contracts reflect the growing appeal of ITIM’s end-to-end product suite and the low churn rate among existing customers.
For the financial year 2024 (FY2024E), ITIM Group’s revenue is projected to be £17.0 million with an EBITDA of £1.0 million and a net cash position of £0.5 million. Looking ahead to FY2025E, the revenue is expected to rise to £19.0 million, EBITDA to £2.9 million, and net cash to £1.0 million. Cummins noted, “While we leave our forecasts unchanged this morning, we note that the length of the contract (in line with similar recent contract wins from the group) should underpin growing levels of recurring revenues for the years to come.”
Strategic Focus and Market Position
ITIM Group has been focusing on chargeable service and implementation work, alongside taking cost management actions to ensure robust performance throughout 2024 and beyond. These strategic moves are expected to bring the group to cash flow break even within FY2025E. Cummins suggests that placing an undemanding EV/Revenue multiple of 1.0x on the shares would imply a fair value of 55p, highlighting the potential for market revaluation given the company’s growth trajectory.
Final Thoughts:
The five-year contract with Assai Atacadista underscores ITIM Group’s capability in providing high-quality data and analytics solutions that meet the demands of large-scale retailers. The series of recent contract wins and the strategic measures in place position ITIM Group well for sustained growth and financial stability in the coming years. As the company continues to expand its customer base and secure long-term contracts, it is poised to enhance its market position and deliver consistent value to its shareholders.
