Workplace Systems International (WSI)
ISR viewWhilst the recession has had a signficant impact on Workplace, the weaker financial performance has masked substantial strategic development of the company with the launch of the SaaS product WorkPlace OnLine. Whilst it is early days, prospects for this new product look very encouraging.
SaaS story knocked; but in tact
Workplace Systems International | Download | Published on 22/03/2011Providing further evidence that the road to SaaS transition can be a bumpy one, workforce management software vendor Workplace Systems announced yesterday that it will not achieve estimates for the year to March. Whilst the business will return to profitability in the second half as expected, revenues have been impacted by slow conversion of pilots to contract. However, the market largely took the news in its stride and the shares were only off slightly on the day.
In terms of the valuation, given the phase of development of the business, we believe that a revenue multiple provides a useful guide to valuation. At around 2x current year revenues, the multiple is at the lower end of what we see SaaS businesses trading at in M&A terms but this rightly reflects the fact that Workplace is still at a relatively early stage of its SaaS journey.