Canaccord slightly lowers target price on Tungsten

Canaccord said Tungsten's recent 2020 full-year trading update suggested that profit and loss metrics were broadly in line with its estimates, while cash flow/net cash was ahead, but added that the firm's second-half results showed sales were 1.5% shy of forecasts.

The Canadian bank said Tungsten's full-year results were a "testament to the ongoing transformation of the company", with a positive free cash flow of £500,000 and a small adjusted underlying earning.

However, the analysts acknowledged that current trading was mixed, as the Covid-19 pandemic pushed e-invoicing network volumes down 8% year-on-year.

"A continued recovery in global economies should return this to growth, and we are encouraged by recent wins for Tungsten's Total AR offering as well as a growing pipeline," said Canaccord, which stood by its 'buy' rating on the stock.

"We have tweaked our revenue estimates to account for softer volumes on the back of current macro weakness but leave adjusted EBITDA and EBIT forecasts largely unchanged."