Home Money MIDAS SHARE TIPS: Tailor made profit from management consultants Elixirr, advisers to the kings of fashion

MIDAS SHARE TIPS: Tailor made profit from management consultants Elixirr, advisers to the kings of fashion

by Elijah
0 comment
Catwalk client: Elixirr clients include LVMH, home of Louis Vuitton



<!– <!–




Catwalk client: Elixirr clients include LVMH, home of Louis Vuitton

Catwalk client: Elixirr clients include LVMH, home of Louis Vuitton

Management consultants have a bad reputation. Accused of charging thousands and delivering too little, they are associated with some of the worst excesses in the business world.

elixir CEO Stephen Newton knows all too well the dangers of the industry. A former managing partner of consulting giant Accenture, he left in 2009 to start something different, an advisory firm that provided practical help to companies.

The strategy is working. Having grown steadily as a private company, Elixirr listed on the AIM junior market in July 2020, one of the few companies to float during that difficult time. It is also one of the most successful listings in recent years, joining the market for £2.17, having since more than doubled to £5.50.

The price increase reflects strong sales and profit growth and there should be much more to come. Companies spend around £200 billion a year on management consultants and the industry is growing between 10 and 12 per cent annually worldwide.

With a stock market valuation of £260m, Elixirr is a minnow compared to giants such as Accenture and McKinsey, but the group has grown sales by an average of more than 30 per cent a year over the last decade and is expected to grow . faster than the rest of the market for some time.

Industry leaders are often criticized for selling customers everything on the shelf, regardless of whether it actually fits their needs. Newton and his team pride themselves on offering a more personalized approach, based on practical advice and tailored to clients’ individual needs.

The group has also developed close relationships with fintech entrepreneurs in Silicon Valley, New York, London, Tel Aviv, Cape Town and Sydney. So when companies come to Newton with problems, they can turn to the network for smart ideas that go beyond normal advice.

Sometimes Elixirr distills the best suggestions from around the web for its clients. Other times, companies meet directly with network members. Whatever the process, the emphasis is on initiatives that can make a tangible difference, rather than empty notions that sound good on paper but have no basis in the real world.

Newton is also interested in making his staff feel and act as if they own the business. To that end, employees receive stock options and access to a generous stock plan, under which Elixirr matches any shares employees purchase, effectively doubling the number of shares they own.

Personalized advice, technological knowledge and committed workers have created a powerful cocktail. Surveys indicate that many companies rate Elixirr higher than its much larger rivals and the number of customers is increasing, including high-profile names such as Tesla, Burger King, HSBC and luxury goods group LVMH, home of the brand. Louis Vuitton fashion.

Elixirr generated revenues of £30 million and profits of £5.8 million in 2020, its first year as a public company.

Figures for 2023 will be released in April, but a recent trading statement confirmed sales will be almost £90m, with brokers forecasting profits of around £24m.

Continued growth is expected, with revenues of £108 million expected this year and £119 million next year. Earnings growth should be equally strong, with profits rising to £28.5m in 2024 and over £31m next. The group has always been committed to paying dividends but, in a sign of confidence and maturity, Newton recently announced a move from annual to semi-annual payments. A total dividend of 12.3p is now expected for 2023, rising to 14p by 2024.

Midas Verdict: Some management consultants have fallen on hard times recently, forced to lay off staff and rationalize costs in response to difficult economic conditions. Elixirr is moving in the opposite direction, adding new clients, expanding its workforce and acquiring boutique operators that complement the business.

Newton and his team are determined to continue in that vein, setting their sights on a £1 billion stock market valuation in the coming years. Progress has been encouraging to date and, with 28 percent of the shares, Newton is certainly motivated to deliver. At £5.50, the shares are a buy.

Traded in: AIM Heart: elix Contact: elixirr.com or 020 7220 5410

You may also like