AIM-listed data erasure and mobile diagnostics software provider Blancco Technology (BLTG:AIM) is becoming a genuine ESG-style investment option as it continues to transform itself.

Half year results to 31 December show good momentum under a refreshed go-to-market strategy, as revenue advanced 19% to £17.4m and adjusted earnings before interest, tax, depreciation and amortisation jumped 29% to £4.4m.

Shares in the business rallied more than 6.5% in morning trade on Tuesday to 201p, valuing Blancco at a little more than £150m.

DATA PROTECTIONS

Blancco is a data erasure specialist, a neat niche in the modern digital world where data privacy and protection is becoming increasingly relevant for consumers and business. In simple terms, the company provides software tools that allow customers to securely wipe data from a range of devices and networks. It also runs a nascent mobile diagnostics arm.

All three operating businesses showed progress, but it was the enterprise unit that stands out.

‘It was very impressive to see the 26% organic growth in its enterprise division,’ said Peel Hunt analyst Damindu Jayaweera. That was ahead of the company’s own near-term expectations of low-to-mid-teens growth.

‘Clearly, there is great product-market fit given the erasure software can satisfy both a customers’ “E” (encourage reuse of and recycle of storage hardware vs physical destruction) and the “G” (encourage better data governance via planning for data end-of-lifecycle) of the increasing ESG focus.'

ESG stands for environment, social and governance, an emerging investment style that looks to incorporate good global citizenship alongside profit goals.

STRATEGIC RESHUFFLE

‘The solid performance is the result of Blancco’s refreshed sales strategy (following the strategic review under new management), and came through particularly in Enterprise, where revenue grew 28% to £6m, (26%  at constant currencies) on the back of both direct and channel sales’, said Indraneel Arampatta of the Megabuyte analysis boutique.

Growing the enterprise side looks like a major objective for Blancco in the coming months, with acquisitions likely to feature to bolster the unit’s reach, product set and customer base.

‘We think the addressable market can be increased here, and for the first time, the company has signposted its thinking by indicating it wants to leverage the balance-sheet to strengthen the enterprise division’, said Jayaweera.

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Issue Date: 18 Feb 2020