mVISE - Resilient in the downturn

A strong performance from its services business (+6% y-o-y) saw mVISE deliver growth, margin uplift and cash flow in H1 despite COVID-19. However, this was partially offset by another shortfall in product revenue ( 39% y-o-y). Sales here were affected by the pandemic, and uncertainty about product growth in H2 has led the company to withdraw guidance and consensus to cut FY20 EPS by 52%. Our concerns are focused on the longer term. FY21 consensus forecasts (15% revenue growth) and the rating (18.0x FY21 EV/EBIT) appear predicated on product growth.