Grafenia (SFT) AI Stock Analysis

• Market Cap: £55.59M
• Dividend Yield: N/A
• Average Volume (3M): 276.53K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.03
• Revenue Growth: 16.13%
• EPS Growth: -700.00%
• Country: UK
• Employees: 131
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): >-0.01
• Shares Outstanding: 390,083,300
• 10 Day Avg. Volume: 344,707
• 30 Day Avg. Volume: 276,534
• PEG Ratio: 4.04
• Price to Book (P/B): 5.40
• Price to Sales (P/S): 6.32
• P/FCF Ratio: 73.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: 15.50p ▼(-34.87% Downside)
• Action: Reiterated Date: 02/24/26
• Date: Action: Reiterated 02/24/26

The score is held back primarily by very weak technical momentum and the lack of profitability (negative net margin and negative ROE). Offsetting this somewhat are improving revenue and operating margins plus a healthier leverage profile, but cash flow trends (notably declining free cash flow growth) and a loss-driven negative P/E keep the overall rating in the lower-middle range.

Positive Factors

Improving revenue and gross margin

Sustained revenue growth alongside a 72.5% gross margin indicates recovering demand and durable unit economics. Higher gross margin suggests pricing power or lower direct costs, supporting margin sustainability and operational leverage over the next several months.

Improved leverage and equity base

A lower debt-to-equity ratio and a >56% equity ratio provide structural financial flexibility. Reduced leverage lowers default risk and preserves capacity to support franchisees, invest in systems, or absorb shocks without immediate capital raises.

Positive operating cash generation

Positive operating cash flow shows the core franchising and services model converts revenue into cash, enabling working capital and support for franchise network. This cash generation underpins medium-term stability even while free cash flow growth lags.

Negative Factors

Negative net profitability and ROE

Persistent negative net margin and ROE mean the company has yet to translate operational gains into shareholder returns. Over months, continued losses erode equity, limit reinvestment capacity, and make it harder to sustainably finance growth from earnings.

Weak free cash flow growth

A near-50% decline in free cash flow growth is a structural concern for reinvestment and balance sheet repair. Even with positive operating cash, shrinking FCF restricts ability to fund capex, franchise support, or reduce debt without external financing.

Concentration in franchising revenue

Heavy reliance on franchise fees, supply sales and support services concentrates revenue on network health. Structural risks include franchisee economic stress, localized demand shifts, or supply disruptions that would meaningfully affect top-line and cash generation.

Grafenia Business Overview & Revenue Model

Company Description

Software Circle plc, together with its subsidiaries, engages in the licensing of various software in the United Kingdom, Ireland, Europe, and internationally. Its brands and solutions include Link Maker, an adoption management software; Be the Brand, a marketing and digital asset management software; Arc technology, an education placement management software; and Nettl systems, a business software that includes a collection of online print platforms and software solutions for business owners to run their graphics. The company also offers Watermark, an online document management system; VERTICAL+, an ecommerce storefront; Topfloor systems provide software services for property management businesses; and CareDocs, a digital care planning and management software. The company was formerly known as Grafenia Plc and changed its name to Software Circle plc in October 2023. Software Circle plc was incorporated in 2000 and is based in Manchester, the United Kingdom.

How the Company Makes Money

Grafenia generates revenue through multiple streams, primarily by selling printed materials and digital marketing services to businesses. Its core revenue model is based on direct sales of products via its online platform, where customers can customize their orders. Additionally, Grafenia earns income from subscription-based services that provide access to design tools and resources. The company also benefits from partnerships with local print shops and resellers, allowing it to expand its reach and service offerings. Key factors contributing to its earnings include a strong focus on customer acquisition and retention, as well as the scalability of its technology platforms, which reduce operational costs and improve profit margins.

Grafenia Financial Statement Overview

Summary

Revenue growth (+8.55%) and a stronger gross margin (72.49%) point to improving operations, and leverage is better with debt-to-equity at 0.50. However, net profitability is still negative (net margin -1.80%) and ROE remains negative (-1.54%). Cash flow is positive but weakening free cash flow growth (-47.58%) limits confidence in the recovery.

Income Statement

Grafenia has shown a positive revenue growth rate of 8.55% in the latest year, indicating a recovery trend. The gross profit margin improved to 72.49%, reflecting strong cost management. However, the net profit margin remains negative at -1.80%, indicating ongoing profitability challenges. The EBIT and EBITDA margins have improved significantly, suggesting operational improvements, but the company is still not profitable at the net level.

Balance Sheet

The debt-to-equity ratio has improved to 0.50, indicating better leverage management compared to previous years. However, the return on equity remains negative at -1.54%, reflecting continued challenges in generating shareholder returns. The equity ratio stands at 56.15%, indicating a solid equity base relative to total assets.

Cash Flow

Operating cash flow is positive, with a ratio of 0.45 to net income, indicating some cash generation capability. However, free cash flow growth is negative at -47.58%, highlighting potential cash flow management issues. The free cash flow to net income ratio of 0.53 suggests that while cash flow is improving, it is not yet robust.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	19.55M	18.27M	16.16M	11.68M	8.92M	6.94M
Gross Profit	599.00K	13.25M	10.19M	5.75M	3.54M	-559.00K
EBITDA	2.95M	4.82M	1.36M	-265.00K	172.00K	772.00K
Net Income	-2.79M	-329.00K	-2.37M	-1.41M	-1.15M	-2.08M
Balance Sheet
Total Assets	38.62M	38.10M	34.39M	23.62M	11.76M	13.58M
Cash, Cash Equivalents and Short-Term Investments	4.80M	8.57M	15.39M	1.99M	1.46M	2.74M
Total Debt	11.87M	10.80M	9.13M	18.72M	0.00	7.08M
Total Liabilities	18.23M	16.70M	12.71M	22.69M	9.27M	9.33M
Stockholders Equity	20.39M	21.39M	21.68M	928.00K	2.49M	4.25M
Cash Flow
Free Cash Flow	2.68M	1.57M	1.42M	-142.00K	-438.00K	-507.00K
Operating Cash Flow	2.71M	2.94M	2.63M	308.00K	134.00K	212.00K
Investing Cash Flow	-9.70M	-7.97M	-5.28M	-8.72M	-575.00K	-842.00K
Financing Cash Flow	-897.00K	-1.79M	16.05M	8.94M	-708.00K	2.27M

Grafenia Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 23.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SFT, the sentiment is Negative. The current price of 23.8 is above the 20-day moving average (MA) of 18.50, above the 50-day MA of 21.65, and below the 200-day MA of 25.28, indicating a bearish trend. The MACD of -2.38 indicates Positive momentum. The RSI at 10.78 is Positive, neither overbought nor oversold. The STOCH value of 15.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SFT.

Grafenia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RST	66 Neutral	£343.68M	36.88	4.01%	2.31%	6.90%	145.00%
CPI	64 Neutral	£401.71M	23.35	9.00%	―	-4.87%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RWS	60 Neutral	£282.78M	-2.82	-12.00%	15.28%	-3.91%	-310.36%
CTG	58 Neutral	£36.29M	17.25	74.66%	2.00%	-12.04%	―
SFT	52 Neutral	£55.59M	-19.79	-12.90%	―	16.13%	-700.00%

Grafenia Corporate Events

Software Circle Sees Consolidation of Stakes by Value Funds

Software Circle plc has reported changes in several significant shareholdings, with Abacus Value Capital Fund AGmvK and Electa Value Capital Fund AGmvK increasing their stakes, while investor Wui Yen Liow has reduced his holding. Together, Abacus and Electa now control 34,826,405 shares, representing 8.93% of the company’s issued share capital, highlighting a notable consolidation of ownership among these related institutional investors.

The updated share register underscores growing support from specialist value funds that share the same AIFM and portfolio manager, potentially reinforcing shareholder alignment with Software Circle’s acquisition-led growth model in vertical market software. The shift in holdings may influence future governance dynamics and market perception of the group’s strategy as it continues to build a diversified portfolio of mission-critical software assets.

The most recent analyst rating on (GB:SFT) stock is a Hold with a £14.50 price target. To see the full list of analyst forecasts on Grafenia stock, see the GB:SFT Stock Forecast page.

Software Circle Executives Boost Stakes in Vertical Market Software Group

Software Circle plc has disclosed share purchases by its top executives, with CEO Gavin Graham Cockerill and CFO Iain Stewart Brown acquiring additional ordinary shares in the company. The transactions modestly increase their beneficial holdings, to 0.05% and 0.06% of issued share capital respectively, and signal internal confidence in the group’s strategy of acquiring and operating vertical market software businesses across the UK and Ireland.

The dealings, executed on the London Stock Exchange’s AIM market at prices between 13.88p and 13.95p per share, were notified in accordance with UK Market Abuse Regulation. The moves may reassure investors about management’s alignment with shareholders as Software Circle continues to pursue disciplined, value-accretive acquisitions while maintaining decentralised operations within its software portfolio companies.

The most recent analyst rating on (GB:SFT) stock is a Hold with a £14.50 price target. To see the full list of analyst forecasts on Grafenia stock, see the GB:SFT Stock Forecast page.

YOGRO GmbH Lifts Stake in Software Circle to 4.21%

Software Circle plc has disclosed a change in its shareholder base, with YOGRO GmbH increasing its holding from 13,079,627 to 16,429,627 ordinary shares, representing 4.21% of the company’s issued share capital. The move marginally concentrates ownership and may signal increased investor confidence in Software Circle’s buy-and-build strategy across vertical market software businesses, potentially reinforcing its position as a consolidator in the UK and Irish software sector.

The most recent analyst rating on (GB:SFT) stock is a Hold with a £18.00 price target. To see the full list of analyst forecasts on Grafenia stock, see the GB:SFT Stock Forecast page.

Software Circle CEO Increases Stake with Share Purchase

Software Circle plc has disclosed that its chief executive officer, Gavin Graham Cockerill, purchased 29,341 ordinary shares at 17 pence each, increasing his beneficial holding to 168,118 shares, or about 0.04% of the company’s issued share capital. The on-market acquisition on AIM modestly lifts insider ownership and may be viewed by investors as a signal of management confidence in the group’s strategy as it continues to build a diversified portfolio of vertical market software businesses in the UK and Ireland.

Operating a buy-and-build model, Software Circle focuses on acquiring mission-critical vertical market software companies, maintaining their independence while supporting organic growth and reinvesting generated cash into further acquisitions. The CEO’s share purchase aligns managerial interests more closely with shareholders and underscores the company’s commitment to disciplined capital allocation and long-term value creation in the specialised software sector.

The most recent analyst rating on (GB:SFT) stock is a Hold with a £20.50 price target. To see the full list of analyst forecasts on Grafenia stock, see the GB:SFT Stock Forecast page.