- Strong free cash flow.
- Impressive organic growth.
It’s unusual for a company in the support services sector to generate eye-catching free cash flow (FCF): many suck in capital as they chase low-margin business. However, one capital light specialist cleaning and soft facilities management services company is growing its revenue base, boosting margins, and is making astute acquisitions to leverage cross-selling opportunities across its customer base.
The financial discipline shown by management is not only reflected in strong growth in profit, but a FCF performance more akin to a technology group. Trading on a prospective FCF yield of 12 per cent and with enterprise valuation (EV) only a mid -single digit multiple of earnings after interest, tax, depreciation and amortisation (Ebitda), the shares offer material upside potential.
