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Canal+, the pay-TV and film production group spun out of French media and telecoms heavyweight Vivendi in mid-December, has not had the smoothest start as a standalone listed company.
The parent business of Paddington producer StudioCanal saw its share price slump more than a fifth on its first trading day, leaving it with a market capitalisation just shy of £2.3bn. Shares have slid by another 14 per cent since.
The spin-off was part of French billionaire Vincent Bolloré’s plan to break up Vivendi and help unwind the conglomerate discount that has weighed on its valuation. Bolloré, Vivendi’s largest shareholder, said Canal+ could be worth close to €7bn (£5.8bn) as a separate entity.
Vivendi, which trades on Euronext Paris, also spun off its advertising company Havas in Amsterdam and its publishing division, Louis Hachette, in Paris. The Bolloré family retains a 30 per cent stake in Canal+.
Taking advantage of the post-IPO slump, Canal+ chief executive Maxime Saada bought £2.2mn worth of shares in the days leading up to Christmas. Louis Hachette boss Jean-Christophe Thiery followed suit, spending a total £172,914 on the shares between the final days of 2024 and January 3.
Founded 40 years ago, Canal+ operates in more than 50 countries and has 26.8mn subscribers globally. It made an operating profit of €426mn (£353mn) on €6.2bn revenue in 2023, with Europe contributing about three-quarters of this total.
Netcall chiefs cash in
Netcall sells “drag and drop” software which enables customers to build their own products without having much coding experience.
It has not always been a software company. In its earlier iteration, it managed call centre switchboards for its customers. This changed in 2017 when it acquired low-code software provider MatSoft and in the past few years Netcall has been growing at an impressive pace.
In the year to June 2024, revenue increased by 9 per cent to £39.1mn, driven by a 19 per cent increase in cloud revenue. Meanwhile, total annual contract value (ATV), which is often a better metric for demand, rose 15 per cent.
As Netcall increases its number of recurring cloud-based customers, it has seen an improvement in cash generation. Operating cash flow rose 23 per cent to £13.8mn over the period, which helped it fund two post period acquisitions, including an AI business.
Despite a strong financial performance in the past few years, the market has only recently started pricing Netcall as a software business. Its share price has risen 13 per cent in the last six months, meaning it now trades on a forward price/earnings ratio of 27.
This higher valuation might have contributed to the recent decisions by non-executive director Michael Jackson and non-executive chair Henrik Bang to sell shares to the value of £198,000 and £1.95mn, respectively. The latter cited “estate planning” and “investor demand” as catalysts for the sale.
It can take a while for the market to appreciate a company that has made a fundamental change to its business. Now, however, Netcall has a new problem: how to adapt to a world with AI. Its strong balance sheet gives it flexibility, but it needs to make the right investment decisions to maintain growth.
