TXT e-solutions - Continuing on the M&A trail

TXT reported robust results for H121, with year-on-year organic revenue growth of 4.7% and recent fintech acquisitions adding a further 31.4% to growth; EBITDA margins expanded 0.4pp to 13.0% y-o-y. Since the end of H1, TXT has acquired a German internet of things (IoT) specialist for €10m, bolstering its exposure to the industrial sector and strengthening its operations in Germany. We estimate the deal is earnings accretive and raise our normalised EPS forecasts by 9% in FY21 and 13% in FY22.