Windward Ltd (LON:WNWD) – The progress of this loss-making group does not disappoint me at all, in fact its shares offer a big Upside.
Yesterday the leading Maritime AI company outlined several contracts wins that it had secured since early July this year.
The reaction to the continued contract momentum was sufficient to push the group’s shares up 10p to 138p at one stage, before closing at 137p.
The Business
Windward is a leading Maritime AI™ company, providing an all-in-one platform to accelerate global trade.
Its AI-powered decision support and exception management platform offers a 360° view of the maritime ecosystem and enables stakeholders to make real time, predictive intelligence-driven decisions to achieve business and operational readiness.
The company’s Maritime AI supports companies across industries, with its clients ranging from oil supermajors, freight forwarders, and port authorities, to banks, shippers, insurers, and governmental organisations.
Wanted By INTERPOL
It even includes INTERPOL as one of its important clients.
At the end of February this year, the group announced that the agency wants to leverage Windward’s insights to advance investigations of suspicious vessels, activities, and areas of interest worldwide, with its platform helping to enhance INTERPOL’s capacity to detect and disrupt illegal maritime activities, including smuggling, piracy, IUU, human trafficking, and the transportation of illegal goods to create a safer maritime environment which is essential for the smooth flow of global trade.
The mission of INTERPOL is to enable police around the world to work together to prevent and fight crime, by offering police a high-tech international infrastructure of technical and operational support to meet the growing challenges of fighting emerging types of crime.
Only through international cooperation can police hope to tackle today’s criminals, with the organisation working to ensure that police around the world can instantly share and access the relevant data necessary to assist their investigations through secure communications channels.
At that time, boss Ami Daniel commented upon winning further business and stated that:
“As the evolving events in the Russia-Ukraine conflict and the security situation in the Red Sea demonstrate, the need for visibility and actionable insight across all facets of the maritime industry continues to grow, driving adoption of our maritime AI platform.
We are committed to providing our customers with the insight they require to trade with confidence and have begun 2024 with continued good momentum.”
The INTERPOL contract followed quickly upon the announcement that the group had expanded its partnership with LSEG, in using the latter’s World-Check One data services to expand its shipping analytics capabilities.
Yesterday’s key customer wins announcement
The company reported that wins in the commercial sector had continued at a steady pace consistent with previous periods, including healthy business expansion from existing customers.
In the ROW government sector, the company has recently won two new customers for a total of $1.9m of annual contract value.
Government renewals in both the Rest of the World and the US sectors, with customer renewals progressing as expected.
MAI Expert
The company stated that acceptance rates for its recently launched MAI Expert, proprietary generative AI agent, have been strong, with six existing commercial customers purchasing access to MAI Expert during their renewal process and several new commercial customers signing up.
The group has now started the rollout of MAI Expert to its public sector customers with a similar price uplift.
MAI Expert now also supports a multilingual response to its customers allowing them a more local experience.
CEO Ami Daniel stated that:
"I am pleased to report continued contract momentum into H2.
Investments into new products are paving the way for new opportunities through an expanded addressable market.
We are laser focused on achieving profitability while continuing to execute against our product roadmap to deliver an enhanced offering for our customer base."
Management confirms the ongoing geopolitical situation in the Middle East has not had a material impact on Windward's activities.
Sensibly, in order to ensure closer cooperation with the industry, the company stated that it had moved its HQ to London in the first three months of this year.
Broker’s View
Analysts Kai Korschelt and Hayley Palmer at Canaccord Genuity Capital Markets have a Buy note out on the group’s shares, looking for 200p as their Price Objective.
Their estimates for the current year to end-December look for a sales uplift to $36.2m ($28.3m) with the group’s adjusted EBIT loss being more than halved to just $2.5m down against $5.7m loss in 2023.
For the coming year they envisage $43.5m revenues and a big improvement to an EBIT coming out at just $0.3m loss.
The year to end-December 2026, based upon current business wins, the analysts see $52.1m turnover, and a positive push into $1.6m EBIT.
My View
This group is seeing an increased demand for its MAI Expert product, which I believe will increase substantially as its roll-out to existing customers gets underway.
The group’s shares, which peaked at 228p in January 2022, were down to just 40p in August last year, before hitting a rennet peak early last month at 163p.
They were only 121p at the start of this week, before the good news started to filter through onto the market.
Last night, on the corporate news, they closed up 9p at 137p, which I would consider to be an excellent level at which new risk-tolerant investors should start to tuck a few away into their growth portfolios.
(Profile 03.04.23 @ 37.5p set a Target Price of 47p*)
(Profile 10.08.23 @ 47p set a Target Price of 75p*)
(Profile 13.12.23 @ 80p set a Target Price of 100p*)
Comments