Interactive Investor

This tech IPO lacks rockstar status - but we should still be excited

25th March 2021 16:09

Graeme Evans from interactive investor


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It’s no Deliveroo or Moonpig, but for investors it taps into many of the same trends.

A tech IPO involving back office operations management may lack the wow factor of a Deliveroo or Moonpig (LSE:MOON), but for investors there's exposure to many of the same Covid-19 trends.

Reading-based ActiveOps, which will be valued at £120 million when AIM trading starts on Monday, is able to help blue-chip clients run their operations safely and efficiently when the workforce is not co-located in an office.

The growth drivers for its Workware+ platform have been highlighted by the pandemic, particularly with many companies now considering allowing staff to choose where they work in future.

The group is primarily focused on the sectors of banking, insurance and business process outsourcing, with customers of its software-as-a-service (SaaS) platform including Nationwide and TD Bank.

Revenues were 13.5% higher at £20.4 million last year after the company secured 13 new customers, taking the total to 78. As the majority of its revenues are billed annually in advance, it has good forward visibility and strong cash generation, finishing 2020 with a cash balance of £7 million and no debt.

Directors believe there's potential to target an addressable market worth more than £750 million in annual recurring revenues.

Chief executive Richard Jeffery, who launched the business in 2005 with Neil Bentley, said: “The scale and increasing complexity of back-office operations provides us with an extensive market opportunity.”

He pointed out that increasing regulation, automation and the changing dynamics of the workforce meant that balancing customer service, efficiency and staff morale had never been more challenging for many companies.

ActiveOps has already seen strong support from investors after raising £75.7 million in a placing of shares ahead of Monday's admission to AIM. The selling shareholders included Calculus Capital and Jeffery, but both will retain significant shareholdings.

The placing at a price of 168p represented 63% of the company's total share capital.

ActiveOps believes that the listing will enhance its credibility when dealing with existing and potential customers, while also providing opportunities to attract, retain and incentivise employees through options schemes.

Jeffery added: “The IPO provides us with access to a blue-chip investor base while enhancing our credibility as we seek to grow our enterprise customer base.”

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Related Categories

    UK shares
    Consumer goods and services
    Robotics & automation

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