Big Technologies dismisses CEO, delays full-year results, trading remains strong
Yikes… Ordinarily, when you wake up in the morning and read an RNS titled "CEO dismissal and commencement of litigation", then it's best to brace oneself.
However, in the case of remote people monitoring group (eg prisoner electronic tagging) () (mrkcap £212m), this might actually be a net positive. Why?
Well, last month the company announced that it had regrettably suspended long-term CEO and founder Sara Murray about the alleged unfair treatment of minority shareholders when acquired Buddi Limited back in 2018.
So, to me, from today's news, it appears that the board of directors has decided to take a firm grip of the situation, and will firstly attempt to resolve the issue with the plaintiffs by perhaps settling out of court. Then, later (if required), they will try to recover any legal costs incurred and damages paid from Sara Murray.
Interestingly too, Sara appears to be a wealthy lady, has been awarded an OBE, and may still own a 44.1% stake via various personal and corporate entities.
More importantly, the business is trading in line with expectations and has also just secured a new £20m contract with the Department of Justice in Northern Ireland to provide electronic tagging services. Plus, with £101m of net cash in the bank and >£50m of annualised monthly revenues, of which 94% is recurring and generating attractive profit margins (re 45% EBIT), I still remain positive on the stock long-term, especially as it trades on a PER of <11x.
Finally, due to the ongoing CEO investigation and legal proceeding, publication of the FY24 audited accounts will be delayed and instead released before mid-June 2025.
My target price on the stock is 150p/share.
Follow News & Updates from Big Technologies:
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.