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MIDAS SHARE TIPS: Support Gandhi’s tech revolution with Panoply

Neal Gandhi founded his first technology company when he was 21 years old. It was 1988, information technology was in its infancy, but he built the business and sold it for £ 37 million before he was 30. The young entrepreneur went on to found and sell three more companies, bringing in an additional £ 80 million.

Then, in 2012, he went into crisis. When he was 45 years old, his second marriage broke up and he wondered how and if he could use his talents to do more than just make money. A brief attempt at volunteerism failed and Gandhi decided to return to what he was good at: technology.

This time, however, he wanted to create a company that would both have a social impact and create returns for shareholders.

Crisis relief: Neal Gandhi's technology company The Panoply has built a system to quickly supply fans to the NHS

Crisis relief: Neal Gandhi’s technology company The Panoply has built a system to quickly supply fans to the NHS

In 2016 he founded The Panoply together with financial director Oliver Rigby. Focusing on government agencies and charities, the company helps government departments, local authorities, and nonprofits use technology to save money, become more efficient, and help more people.

The company has made impressive progress. Panoply entered the junior AIM market only two years ago and has more than doubled in size. However, at £ 1.18 there is still a lot of potential in the stock. Too many government IT contracts cost the earth and yield nothing. Panoply wants to be different.

Clearly arranged through expensive, old-fashioned systems, the company offers technology that is reasonably priced, easy to operate and actually works.

In the spring, for example, when the government was desperate for ventilation equipment to help Covid19 patients, Panoply created an entirely new online platform that would allow British manufacturers to collaborate and build the equipment the NHS needed.

The system was operational within two weeks and generated 5,000 responses from companies willing and able to help. Homes England and the Planning Inspectorate are also clients of Panoply, applying the group’s technology to streamline the planning process and encourage the development of more new homes.

Other clients include the NHS and the government departments for education and transportation, as well as business, energy and industrial strategy.

Numerous local authorities also use Panoply’s software to improve processes and outcomes in areas such as social care, housing benefits and unemployment, so that councilors can do more for fewer and vulnerable people can get the support they need.

Charities such as Unicef ​​and Diabetes UK have also turned to Panoply to make online fundraising campaigns more effective.

Panoply isn’t just about doing good, though. The company is very profitable and growing rapidly. Interim results will be released next week and Gandhi has said they will show double digit sales and earnings growth. The group also plans to pay dividends and an initial distribution will be disclosed alongside the half-year figures.

For the year to March 31, analysts expect revenues to grow 34 percent to £ 42.5 million, with profits up 62 percent to £ 4.7 million. A total dividend of 0.6 pence will be entered in pencil, increasing to 0.8 pence by 2022.

Gandhi is confident that group revenues will reach £ 100 million over the next three years, with further growth thereafter. Panoply is already bringing in a lot of business in the public sector. As the business grows and makes his mark in central and local government, Gandhi is likely to do even more business.

To date, Panoply has expanded through a combination of organic growth and smart acquisitions. Starting with four listed companies, the group now owns 11 companies and more deals are expected.

In any case, Gandhi and Rigby look not only at what potential acquisitions are doing, but also at what motivates the people behind them and whether they fit with the Panoply culture. Research is extensive, but it seems to be working as companies have merged and often collaborate on projects.

At the start of the year, there were concerns that the Covid-19 pandemic would throw Gandhi off course. Instead, government agencies with little money are more willing than ever to find nimble companies that can help them use technology effectively, rather than big, traditional providers who seem more adept at wasting billions of pounds in taxpayers’ money than delivering it. Results.

Midas verdict: The Panoply is an unusual name for a company, but Gandhi chose it because he wanted to build an impressive collection of businesses. The strategy has proven successful so far, but Gandhi is determined to do more. His track record is encouraging and he owns more than 14 percent of the business, so he’s incentivized to make it work. For £ 1.18 the shares are a buy.

Traded on: TARGET Ticker: TPX Contact: thepanoply.com or 020 3405 0206

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