| Circle’s Value of Production for FY24A stood at €14.58 million, compared to €13.21 million recorded at the end of 2023 and below the €15.70 million estimated in our previous report. EBITDA stood at €3.01 million in FY24A, marking a slight decrease of 5.5% compared to €3.19 million in the previous year. The EBITDA Margin was 20.7%, down approximately 3.5 percentage points from the FY23A figure of 24.1%. EBIT, after depreciation and amortisation totalling €1.34 million, amounted to €1.68 million (vs. €2.05 million in FY23A). Net Income totalled €1.45 million, marking a 13.5% decline compared to €1.68 million in FY23A. From a balance sheet perspective, the Net Financial Position (NFP) improved to a cash positive €1.96 million, compared to a cash positive €1.65 million as of 31 December 2023. In light of the results published in the annual report for FY24A, we have adjusted our estimates for both the current year and the following years. In particular, we now estimate an FY25E value of production of € 23.00 million, and an EBITDA of € 5.20 million, corresponding to a margin of 22.6%. In the following years, we expect the value of production to reach € 33.00 million (CAGR 24A-28E: 22.7%) in FY28E, with EBITDA equal to € 8.30 million (corresponding to a margin of 25.2 %), up from € 3.01 million in FY24A (corresponding to an EBITDA margin of 20.7%). From a balance sheet perspective, in line with our expectations, the Adjusted Net Financial Position (NFP) could reach a cash positive value of €5.24 million in FY25E. We conducted our valuation of the equity value of Circle based on the DCF method and multiples of a sample of comparable companies. The DCF method (including, for prudential purposes, a specific risk of 2.5% in the calculation of the WACC) returned an equity value of € 44.8 million. Using market multiples, the equity value of Circle was calculated as € 50.8 million (including a 25.0% discount). The results give an average equity value of approximately € 47.8 million. The target price is € 10.00, with a BUY rating and MEDIUM risk. |
