LSE:APTD

Stock Analysis Report

Aptitude Software Group

Executive Summary

Aptitude Software Group plc, together with its subsidiaries, develops, implements, and supports business critical software and related services in the United Kingdom and internationally.

Rewards

Trading at 21.2% below its fair value

Earnings grew by 67.3% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -33.9% per year for the next 3 years

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Latest financial reports are more than 6 months old



Snowflake Analysis

Flawless balance sheet and good value.

Share Price & News

How has Aptitude Software Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: APTD's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.8%

APTD

0.3%

GB Software

0.5%

GB Market


1 Year Return

16.7%

APTD

15.7%

GB Software

6.6%

GB Market

Return vs Industry: APTD matched the UK Software industry which returned 17.2% over the past year.

Return vs Market: APTD exceeded the UK Market which returned 6.1% over the past year.


Shareholder returns

APTDIndustryMarket
7 Day0.8%0.3%0.5%
30 Day-18.5%-1.4%-2.4%
90 Day-13.3%8.7%4.0%
1 Year35.1%16.7%23.4%15.7%12.2%6.6%
3 Year135.7%97.4%15.3%-2.8%17.8%2.9%
5 Year366.0%186.5%57.1%30.3%35.7%4.6%

Price Volatility Vs. Market

How volatile is Aptitude Software Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Aptitude Software Group undervalued compared to its fair value and its price relative to the market?

21.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: APTD (£5.2) is trading below our estimate of fair value (£6.6)

Significantly Below Fair Value: APTD is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: APTD is good value based on its PE Ratio (18.9x) compared to the Software industry average (32x).

PE vs Market: APTD is poor value based on its PE Ratio (18.9x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: APTD's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: APTD is good value based on its PB Ratio (3.2x) compared to the GB Software industry average (3.4x).


Next Steps

Future Growth

How is Aptitude Software Group forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

-33.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: APTD's earnings are forecast to decline over the next 3 years (-33.9% per year).

Earnings vs Market: APTD's earnings are forecast to decline over the next 3 years (-33.9% per year).

High Growth Earnings: APTD's earnings are forecast to decline over the next 3 years.

Revenue vs Market: APTD's revenue (2.8% per year) is forecast to grow slower than the UK market (3.5% per year).

High Growth Revenue: APTD's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: APTD's Return on Equity is forecast to be high in 3 years time (25.2%)


Next Steps

Past Performance

How has Aptitude Software Group performed over the past 5 years?

28.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: APTD has a large one-off gain of £3.1M impacting its June 30 2019 financial results.

Growing Profit Margin: APTD's current net profit margins (19.9%) are higher than last year (14.6%).


Past Earnings Growth Analysis

Earnings Trend: APTD's earnings have grown significantly by 28.1% per year over the past 5 years.

Accelerating Growth: APTD's earnings growth over the past year (67.3%) exceeds its 5-year average (28.1% per year).

Earnings vs Industry: APTD earnings growth over the past year (67.3%) exceeded the Software industry 8%.


Return on Equity

High ROE: APTD's Return on Equity (16.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Aptitude Software Group's financial position?


Financial Position Analysis

Short Term Liabilities: APTD's short term assets (£86.5M) exceed its short term liabilities (£30.8M).

Long Term Liabilities: APTD's short term assets (£86.5M) exceed its long term liabilities (£4.1M).


Debt to Equity History and Analysis

Debt Level: APTD is debt free.

Reducing Debt: APTD has no debt compared to 5 years ago when its debt to equity ratio was 32%.

Debt Coverage: APTD has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: APTD has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: APTD has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if APTD's debt is covered by short term assets.


Next Steps

Dividend

What is Aptitude Software Group's current dividend yield, its reliability and sustainability?

1.45%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.8%markettop25%5.1%industryaverage2.3%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: APTD's dividend (1.45%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: APTD's dividend (1.45%) is low compared to the top 25% of dividend payers in the UK market (5.1%).


Stability and Growth of Payments

Stable Dividend: APTD's dividend payments have been volatile in the past 10 years.

Growing Dividend: APTD's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.7%), APTD's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: APTD's dividends in 3 years are forecast to be covered by earnings (59.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

Jeremy Suddards 0

0.08yrs

Tenure

0

Mr. Jeremy Suddards serves as Chief Executive Officer of Aptitude Software Group plc since January 20, 2020 and serves as its Director since September 1, 2019. He served as Chief Client Officer for Europe  ...


Leadership Team

NamePositionTenureCompensationOwnership
Philip Wood
CFO, Deputy CEO13.1yrsUK£829.14k0.35% £1.0m
Jeremy Suddards
CEO & Director0.08yrsno datano data
Chris Wade
Chief Product Officer2.1yrsno datano data
Alex Curran
Executive Vice President0.6yrsno datano data
Georgina Sharley
Company Secretary1.2yrsno datano data
Martin Redington
Chief Technology Officer of Aptitude Software18yrsno datano data

1.6yrs

Average Tenure

Experienced Management: APTD's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Philip Wood
CFO, Deputy CEO13.1yrsUK£829.14k0.35% £1.0m
Jeremy Suddards
CEO & Director0.08yrsno datano data
Ivan Martin
Non-Executive Chairman3.9yrsUK£134.00k0.31% £910.0k
Barbara Moorhouse
Non-Executive Director2.8yrsUK£51.00kno data
Peter Whiting
Senior Independent Non-Executive Director3.8yrsUK£55.20k0.029% £84.9k

3.8yrs

Average Tenure

57yo

Average Age

Experienced Board: APTD's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Aptitude Software Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Aptitude Software Group plc
  • Ticker: APTD
  • Exchange: LSE
  • Founded: 1974
  • Industry: Application Software
  • Sector: Software
  • Market Cap: UK£292.344m
  • Shares outstanding: 56.22m
  • Website: https://www.aptitudesoftwaregroup.com

Number of Employees


Location

  • Aptitude Software Group plc
  • Old Change House
  • 128 Queen Victoria Street
  • London
  • Greater London
  • EC4V 4BJ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
APTDLSE (London Stock Exchange)YesOrdinary SharesGBGBPMar 1985
MH5BBST (Boerse-Stuttgart)YesOrdinary SharesDEEURMar 1985
APTDLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMar 1985

Biography

Aptitude Software Group plc, together with its subsidiaries, develops, implements, and supports business critical software and related services in the United Kingdom and internationally. It operates through two segments, Aptitude Software and Microgen Financial Systems. The Aptitude Software segment provides a suite of specialized finance management software applications for banking, healthcare, insurance, and telecommunications customers. Its applications include Aptitude Insurance Calculation Engine that focuses on insurance contracts; Aptitude Lease Accounting Engine, which addresses leasing standards; Aptitude Revenue Recognition Engine for revenue recognition requirements; Aptitude RevStream, a cloud-enabled revenue management software; Aptitude Accounting Hub that transforms financial, management, and statutory accounting; and Aptitude Allocation Engine that offers interfaces to set-up and apply rules to allocate cost and revenue. This segment licenses its software; and provides software maintenance/support, software subscriptions for its cloud-based offerings; and implementation services. The Microgen Financial Systems segment offers Microgen 5Series, a wealth management software for both on-shore and off-shore markets; and Microgen Bacway, a suite of payments software products. It also provides maintenance, support, and development services on a range of software products and applications developed by third parties. The company was formerly known as Microgen plc and changed its name to Aptitude Software Group plc in April 2019. Aptitude Software Group plc was founded in 1974 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 20:42
End of Day Share Price2020/02/17 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.