Fortnox report

Fortnox a silent winner


My best-performing share the past two years are by far Fortnox. At the same time, the Fortnox share does not attract much attention in forums and elsewhere investors discuss their investments. Probably because the news flow is low. There is a report, then three months later another. During these three months, the only thing that had happened is that Fortnox earns more money, acquire more customers and have a better marginal. That is why I think of Fortnox as a silent winner.

Business development in Q2

The Q2 report came on August 22th. Again Fortnox succeeded in raising the number for customers 6 % from 220.000 to 233.000 small companies compared to Q1. Compared to last year it is a 29 % growth. This is one of Fortnox two paths to growth. The other is turnover per customer. From Q1 to Q2 it went up 2 SEK from 125 to 127 SEK. Compared to last year it is up 9 SEK. In short; more customers buying more. This is a strong formula for growth.

The turnover of MSEK 89.8 is up 41 % compared to Q2 last year, and 10 % compared to Q1. Profits after tax is MSEK 16.7 (14.4 in Q1). Profit per share is SEK 0.29, in Q1 SEK 0.24 and last year SEK 0.17.

Margin has improved during Q1 and Q2. In Q2, it was 24.7. Fortnox aims at a growth of 25 % and a margin of 20. They are well above on both growth and margin.

The above shows a strong growth case. Fortnox succeeds in high growth and profitability at the same time. By the end of Q2, Fortnox has no long-term debts and 177 MSEK in cash.

During the last quarter, two new services have become available. This is insurances and a CRM system, which will probably add to growth in coming quarters.

The Fortnox share

My personal conclusion is that the underlying growth and profitability is very strong which will provide basis for a strong share performance as well.

Fortnox closed at SEK 43.10 on December 29th, the last day before New Year. On the report date, the share closed at SEK 82.7. Since then, it continued up wards a bit and then fell back. When writing this, the price is SEK 80.7. This latest price represents an 87 % rise this year. (Find more information on the share price movement here.)

In my portfolio this is only surpassed by Cantargia in 2018 (rise 194 %). While Cantargia have moved up and down since the IPO in 2015, Fortnox have generally moved upwards, but had a long period (until October 2015) moving between 10 and 11 SEK. The only setback in share price was after cancellation of a bid from another company in June 2016. At that point, it fell from SEK 22.4 to SEK 15.40 in one day, but it took only 37 trading days to recover. Fortnox does not jumb up and down, but steadily climbs upwards with only a few minor setbacks. This makes it a rare bird among the shares of my portfolio.

Check out my growth share portfolio, the share price trigger list or my EGS (Evaluation of Growth Shares) Model.

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