The Computime Group has achieved remarkable success since its inception in 1979, from expanding market share to innovating in the AI and FinTech space in more recent years. As the company continues to evolve, Group CEO and Group CFO, Andrew Borg and Alistair Mangion, discuss an exciting new development— the Group share offer that will help fuel the next phase of their growth. In this interview, two of Computime’s key decision-makers, explain what has driven the company’s success, the strategic vision for the future, and what investors can expect from this share offer.
What are the main products and services that Computime offers?
The three divisions of Computime consist of the System Integration, Business Software and Fintech divisions. The first relates to the design, implementation and support of the IT infrastructure needed for a corporate business to operate: networking, information security, systems, cloud and managed services. The Business Software is driven by four units: an ERP implementation team, a financial management solution team, asset management team and a custom software development team. The third division relates to in-house developed fintech products: the BRSANALYTICS suite of regulatory reporting software, used by many of the financial institutions in Malta, and ComplyRadar, which is an AML transaction monitoring solution used in the international market. Recently we have teamed up with one of the Big 4 to develop and market another product, BRS CESOP. All three software suites are well established and successful. We keep innovating with new products utilising leading technologies such as AI and machine learning.
AI has been attracting a lot of attention in media and in financial markets over recent periods. Does Computime also operate in this sector?
The Computime Group has been employing AI technology in its software development process for years. A key example is the fraud detection module in ComplyRadar, one of the Group’s main products, where a sophisticated rules engine using Artificial Intelligence (AI) and Machine Learning (ML) technology is used to flag suspicious transactions for our customers in the banking and gaming industries.
More recently the Group has been developing a new product that leverages generative AI for business reporting. This new product, which is still in testing phase, will assist customers to easily query their business data (such as accounting or CRM data) using natural language. The concept has already been validated successfully with select customers, and the commercialisation phase is expected to start in early 2025.
What key milestones or achievements, partnerships and alliances, and strategic business decisions do you believe were pivotal in positioning the company for a successful share offer?
The Group’s main strength lies in its extensive tech sector experience gained through almost 45 years of operation in the industry. Such strength comes in the form of long-standing partnerships with leading global operators, a highly skilled and experienced workforce, a loyal “blue-chip” customer base, and an experienced management team having decades of combined tech business experience. The business model itself benefits from a highly diversified portfolio of solutions and services, ranging from the provision of hardware and managed services to FinTech and ERP software. Another key element of the model is the substantial recurring revenue that has been built over time, currently amounting to around 66% of total revenue. This recurring revenue adds to the stability of the profits and the cash flows, and effectively de-risks the business.
Can you share specific examples of how your business model has evolved over time, and how these changes have prepared you for this share offer?
Traditionally IT depended on project work. As a result, revenue was very dependent on a steady stream of projects. This leads to many spikes and dips in revenue and stresses cashflow and profitability. At Computime, we have always been aware of this challenge so starting many years back. we de-risked the business by consciously identifying opportunities to increase our subscription, support and maintenance business. In practice this means that at the start of the financial year a large portion of our annual revenue is already contracted. Consequently, this allows for better business planning and smoother operations.
Does Computime have a dividend policy and what are expectations for dividend payments going forward?
The Computime Group has a strong dividend track record, made possible by (a) years of sustainable growth supported by the substantial recurring revenue (i.e. that portion of revenue that is renewable on a yearly basis); and (b) a business model characterised by particularly robust cash flow generation. Going forward, the Boards’ policy is to recommend a dividend distribution of not less than 60% of the profit after tax in each year. As for financial years 2024 and 2025, the company is planning to distribute 75% and 70% of the Group’s distributable profits respectively, subject to the profit forecasts for these years being met. Based on the planned payout ratio and the Company’s profit projections, a NET dividend yield of 5.5% and 6.1% (Gross 7.9% and 8.9%) is being projected for financial years 2024 and 2025 respectively.
Interested investors are invited to view the prospectus on www.computime.com.mt.
Prospective investors are urged to read the prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in the shares forming part of the share offer. The approval of the prospectus by the MFSA should not be understood as an endorsement of the shares forming part of the offer or admitted to trading on a regulated market.