There is already a general thread here about IT companies, but I’ve wanted to bring up Vincit separately for a while now.
Software development expert Vincit is characterized as an agile IT services company, combined with a strong corporate culture, satisfied employees, and customer loyalty. The business can be divided into two main business areas: software development and ICT services. Software development is mainly project-based work based on hourly billing.
Currently, investors are likely interested in the company’s investment in new SaaS-based solutions, e.g., LaaS (https://vincitlaas.fi), through which it seeks a new foundation for its business. The successful implementation and sale of these products could make the investment case potential in its own way.
Vincit’s competitive advantages are perceived as agility, customer loyalty, satisfied employees, and (consequently) success in recruitment. Vincit’s profitability and growth have been among the best in the sector. The recent share price decline is a result of, among other things, the company’s weak recruitment, slow revenue growth, and probably the highlighted recruitment problems of IT firms. Correspondingly, the share price has started to recover, apparently due to Vincit’s recent successful deals and acquisitions.
What do you think of the company? Are a strong corporate culture, innovativeness, building a new pillar with new products, and agility key to creating shareholder value? Or do some feel that Vincit is too much of a “playground for coders”? And the big question mark: will the company succeed in recruitment in the future as well and create growth through it? Is success in recruitment the only real competitive advantage in the short term? Does growth rely on that in addition to acquisitions? The last interim report wasn’t very encouraging regarding recruitment. I personally took a small position after that latest dip, and since the IT sector is generally a bit of a gray area for me, it would be nice to hear some pros and cons about this company from industry experts and everyone.
Vincit EAM is a cloud-based enterprise resource planning (ERP) system, already in use by several clients. https://vinciteam.com
The websites for Vincit EAM and the management tool LaaS (https://vincitlaas.fi) are indeed examples of innovation and are even amusing. Is that good or bad from the perspective of a critical investor? A fundamental investor is interested in the product’s functionality, necessity, and clients’ willingness to acquire the product.
P.S. This is an interesting case regarding these SaaS products. I’m eagerly awaiting the Q1 report on February 14th and evidence of how these products have been sold. Will these SaaS solutions constitute a larger portion of revenue in the future?
Then Vincit also has products/solutions like VincitSign and VincitESB.
Years ago, I came across Vincit in a context completely unrelated to programming. It turned out they were growing rapidly and seemed to have a good vibe. The business has appeared to be improving all along. The interim report videos are convincing ;),
-good and growing self-sufficiency
-no debt
-dividend close to 4%, which is close to my minimum hope (though after taxes, so 5% would be good). The dividend payout ratio isn’t terribly high. Growing and profitable.
-good demand in the industry, despite competition for talent.
-bonus software side, whose development has probably taken resources, and perhaps slowed growth for this reason?
Currently, I’m a bit below my average price. I feel reasonably confident that in a few years, we’ll get that 4% cash flow. It’s a medium-sized position in my portfolio.
P.S. I bought a small slice of Innofactor at €0.39/share
Vincit’s financial statement release is on Thursday. I’m interested in the release, of course, for things like revenue growth, which was weak in the last business review, and headcount growth, which was also weak last time. Additionally, I’m keen to hear how these new SaaS-based products (Laas, VincitEam) have gained traction. The company has recently been quite active in announcing its latest deals, so there are unlikely to be any surprises in that regard, and this at least to some extent indicates revenue growth.
All in all, an interesting Valentine’s Day ahead. A lot of my portfolio’s earnings reports fall on that day; will I even have time to be with my significant other?
I apparently spoke about ICT services in that opening message. The company actually sold off its ICT services during H1, focusing entirely on software development. So, apologies for that
Yeah, same here What can you do when you get it cheap.
P.S. For the first time in a while, I poured myself a glass of whiskey, this time American whiskey, Jim Beam. But it definitely falls short compared to Scottish whiskies, especially those from the Isle of Islay.
It seems the number of employees took a slight hit. Similarly, all lines, especially in the second half of the year, seemed to fall a bit short. Fortunately, the CEO himself admitted to a “maximally satisfactory” year in terms of business. I wasn’t expecting any “bank-blowing” results from those SaaS products yet in this earnings report. But I’ll have to read and investigate more tonight.
I quickly looked at it from the perspective that growth was a healthy 20% when excluding the sale of one business.
Profitability has surely been weighed down by the development of the product business (the same people aren’t producing anything, but coding software that will be sold now/later, at which point some might be freed up for other coding?).
Agreed, there was nothing overly dramatic about it. Perhaps the market reacted a bit to the numbers revealing that Vincit doesn’t have any secret formula for strong and profitable growth either, but is starting to resemble an “ordinary company.”
Regarding those XaaS things, which are supposed to help them break away from mere “personnel leasing” (consulting), there isn’t really anything concrete yet.
Yeah, not a catastrophe. In my opinion, the increase in personnel and the end of the year was weak, but the last business review also somewhat indicated a weak end of the year. But I find this year interesting, for example, regarding the product business, if we can reduce costs and if something starts to remain under the line. Otherwise, the company’s clear focus seems quite interesting. I thought I’d stay on board.
I also own Vincit; I’ve been with them from the beginning.
The statement’s focus areas sounded reasonable. The only thing that caught my eye was a slight expansion of their activities:
“As a result, over the past year, we have, among other things, established the RedCell unit, which focuses on management consulting.”
It’s often hard to understand why a software company, with its background, would venture into business consulting. Where do the experts for that come from, certainly not their own coders. So how do they get something like that off the ground?
The team seems good. It’s probably a good model, for example, to get cases started and then feed the tech side with additional work or rather, extensive work.
It’s progressing quite nicely, now just selling new products and developers partly selling services = improving profitability and revenue growth = stock price increase , if this year’s dividend is also spread out "for future years, then we’re already close to the 4% minimum requirement level?
and everyone.
What can you do when you get it cheap.
