Notwithstanding the current distressed economic environment, which has been primarily fuelled by the COVID-19 pandemic, Harvest Technology plc (Harvest) recently issued a positive performance review for FY20 and improved projections for FY21. 

As marketing campaigns had to be postponed due the COVID-19 outbreak, during FY20, the Group experienced a reduction in travelling costs and marketing expenses. Additionally, management further reported that upon managing project financing in a proactive manner, the Group has also benefitted from a decline in their respective finance costs.

More specifically, as at Q3-2020, the Group announced that it has generated a profit before tax of €2.9m, representing an overall improvement of circa 20.8% over what was projected at IPO stage (€2.4m). 

Although management is expecting the pandemic related challenges to at least sustain until the first half of FY21, the Group is predicting to generate a revenue figure of €19.5m for FY21, signifying an increase of 6.8% over previous forecasts. 

This anticipated improvement is mainly attributable to several important development milestones, including efforts aimed towards extending the Group’s partners network and introducing new online payment products and services, which are expected to come to fruition by the end of Q2-2021. Consequently, upon assessing the updated projections for FY21, the Group is now projecting to achieve an EBITDA margin of 25% and a profit before tax of approximately €4m against the €3.4m previously forecasted. 

Evidently, the Group continued to exceed IPO expectations and achieve solid results even throughout such extraordinary times. In addition to the positive news concerning the conclusion of the Group’s Mauritius contract and the Q3-2020 robust results, management reported that the Group is currently in the process of further consolidating its local presence, as well as focusing on internationalisation across all business segments.

Additionally, we reiterate our stance that the shares provide investors with an exposure to a Group of companies within the technology sector in Malta, and which is well-positioned for further expansion in other countries. 

Despite the COVID-19 situation, the Group’s liquidity position remained healthy and as a result the Group resolved to distribute an interim dividend of €0.5m or €0.024/ share. In view of the above positive developments, Harvest further reported that the projected dividend payments amounting to €0.06 per annum are expected to be maintained in FY21, however no firm commitment is being made at this stage. 

As things stand, we believe that the Group has the sufficient internal capability to continue on its current growth trajectory and deliver on the declared expectations and beyond as witnessed through the Group’s Q3-2020 results update. 

Disclaimer: This article was issued by Andrew Fenech, research analyst at Calamatta Cuschieri. For more information visit The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.

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