SNP Schneider-Neureither & Partner - Strong Q3 profits recovery

Q3 results reveal that SNP is stabilising after the July profits warning. While underlying revenues showed a small contraction, profits recovered strongly. This indicates that costs saving measures are beginning to have an impact. Additionally, SNP has recently won several small S/4HANA migration contracts which indicates the S/4HANA business is beginning to gain momentum. We have increased our FY18 profits forecasts while maintaining revenues. While the shares look punchy on c 24x our FY19e earnings, the rating could fall quickly as new projects come through.