By Apostolos Manthos
The announcement of the results for 2023 by Intrakat (INKÁT) calls for special attention to those data that show the evolution of the group. How quickly it changes shape and sizes. Or in simple terms what it turns into.
Just be careful not to fall like schoolgirls into the pit of comparing the capitalization of 800 million euros on the board of the Greek Stock Exchange and the net profits of 3 million euros. The “smart money” that has invested and continues to invest in Intrakat’s stock driving it to this market capitalization isn’t looking at 2023 at all, but at what appears to be shaping up in the coming years.
In any case, management had suggested to analysts and investors since last summer that its main goal was to turn the year around from losses to profitability. Turn the steering wheel 180 degrees. Then the price was just over 2.30 euros and then shot up to 5.64 euros. So the data that the market sees in Intrakat was different and apparently it has to do with the fact that throughout 2023 Exarchou and his management team were placing through their highly aggressive strategic moves the necessary fuel for the launch of the group in the next five years. Movements in which currently only the three variables have been manifested. Actor, PPC and Romania. Soon others will be revealed.
Strategic deals which have begun and can be seen gradually taking shape in the financial statements with the group achieving an explosive increase in total assets where from 425.8 million euros in 2022 they were found in 2023 by +235% higher to 1.427 billion euros . The consolidated turnover was also particularly dynamic, reaching 412 million euros against 225 million euros in 2022, thus marking an increase of 83% with the consolidated gross profits amounting to 40 million euros from 18 million euros in 2022, boosted by 122%.
At the same time, the group significantly improved both its capital structure and its liquidity. In particular, consolidated equity amounted to 162 million euros from 60 million euros in 2022, strengthened by 168%, while at the same time net borrowing decreased by 3.4% to 123 million euros. A large increase of 100 million euros was recorded in the cash reserves of the group, which amounted to 125 million euros against 25 million euros at the end of 2022, while the consolidated net operating cash flows were significantly strengthened, which amounted to 77 million euros from 15 million euros in 2022.
But what puts the bullish stamp on growth in the coming years for Intrakat, as we all knew 2023 would be a strong transition year going forward, is the new all-time high in the signed and under-contracted backlog, which almost trebled to €4.9bn from €1.3bn in 2022 with the strategic acquisition of Actor adding a backlog of €2.7bn to Intrakat’s existing backlog.
Diagrammatically, the stock continues to show upward steps with strong buying pillars such as those at 2.90 euros, 3.75 euros and 5 euros. The diagrammatic target after the required diagrammatic push in the area of 5 to 4.75 euros leads to 6.20 euros.
I continue with her Austriacard Holdings (AGAC) where it also took on a new important digital technology project undertaking the pivotal project of transforming the Public Health System by digitizing 197 million pages and images, including medical files, X-rays and ECG/EEG films, of patients in health units throughout Greece with its share to exceed 11 million euros in revenue.
The news may have passed by “some” in the fine print, but the group has entered very strongly into almost all the digitization projects of the state with funds from the Recovery Fund (RRF). In fact, the total backlog of projects has now broken the barrier of 80 million euros, which means that it has already secured annual revenues of 25 to 30 million euros from this year to 2026.
Of course, nothing is over yet as there are still dozens of public sector digital transformation projects and not only that, Austriacard can still grab a significant share of deals, well exceeding 130 million euros.
However, the big asset for the growth of the group is that it has started to hit similar projects in Romania and Austria where it has had a strong presence and recognition for years. For example, Austriacard has taken over health cards and driving licenses in Austria. Didn’t you know? So that’s where you found out.
Projects which are now just starting since these countries have lagged behind in digitization projects through EU funds. You see, believe it or not, Greece moved quickly and first in these programs through the RRF.
So the projects that are starting to come out in these two states have a higher budget compared to Greece, a fact that gives particular interest to the group’s subsequent moves in digitization competitions. You understand of course that with the partnership of both of these countries in financing the development of digital skills the revenue that can flow to Austriacard is capable of doubling the already backlog of 80 million euros that exists in Greece.
But be careful because these revenues have a large profit margin (>20%) for the group, significantly raising the group’s total EBITDA together with the other revenue sectors such as payment solutions, identification, smart cards, card personalization and secure data management for companies of the financial sector of the general private sector and the public sector.
The two strategic acquisitions that Austriacard has made in recent years have contributed the most to the high profit margin, improving its expertise in digital services. We are talking about the Romanian company Nextdocs and the Cypriot company Cloudfin where they are active in the software and system of document management, automatic identification, physical archiving and digital recording using machine learning and interfacing with ERP systems. So with these document digitizing machines, the costly manual work is reduced to the lowest possible level, increasing the profitability rate on the revenue.
The opportunity to enter the stock at these price levels may turn out to be great along the way, since it has understood absolutely nothing of what Austriacard’s large technology group can develop, remaining significantly behind compared to the rest of the listed technology groups. It has also lagged behind the market movement over the last twelve months as it has recorded a rise of +8% while the General Index has a return of +42%.
Of course, you encountered the same “phenomenon” in other share values of the sector (Profile, Performance, Real Consulting) when we first brought them to light, citing their great potential for growth. And then they thought about it. Now of course not a word.
Diagrammatically, the stock shows that it is preparing to test the resistance area at 6.80 euros for the second time. An upward bypass of the area in question will initially open the uphill road to the level of 7.70 to 8 euros or up to a +25% from the current cheap potential price levels.
* Apostolos Manthos is responsible for technical analysis & investment strategy
