Grafenia (SFT) AI Stock Analysis

• Market Cap: £93.23M
• Dividend Yield: N/A
• Average Volume (3M): 276.53K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.32
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: 24.50p ▲(2.51% Upside)

The overall stock score is driven by positive corporate events and strategic acquisitions, which indicate growth potential. However, financial performance and valuation concerns, particularly negative profitability and lack of dividend yield, weigh down the score. Technical analysis suggests a bearish trend, further impacting the overall assessment.

Positive Factors

Revenue Growth

Grafenia's consistent revenue growth indicates a successful business model and market demand, supporting long-term sustainability.

Operational Improvements

Improved gross profit margins suggest effective cost control, enhancing the company's ability to generate profits over time.

Leverage Management

Better leverage management reduces financial risk, providing a stable foundation for future growth and investment.

Negative Factors

Profitability Challenges

Negative net profit margins indicate ongoing challenges in achieving profitability, which could hinder long-term financial health.

Cash Flow Management

Declining free cash flow growth suggests potential liquidity issues, impacting the company's ability to fund operations and growth.

Shareholder Returns

Negative return on equity reflects challenges in generating returns for shareholders, affecting investor confidence and capital attraction.

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

Grafenia shows positive revenue growth and improved operational margins, but profitability remains a concern with negative net income. The balance sheet indicates better leverage management, yet returns on equity are still negative. Cash flow management needs improvement, as highlighted by the decline in free cash flow growth.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 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: 23.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 23.9 is below the 20-day moving average (MA) of 23.96, below the 50-day MA of 23.94, and below the 200-day MA of 27.01, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 45.56 is Neutral, neither overbought nor oversold. The STOCH value of 61.26 is Neutral, 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
INSE	77 Outperform	―	―	―	―	-5.03%	―
KEYS	76 Outperform	£194.74M	20.00	56.75%	5.94%	16.29%	22.80%
BEG	69 Neutral	£183.46M	18.36	12.60%	3.91%	8.31%	305.88%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KGH	61 Neutral	£146.74M	19.37	7.40%	2.81%	8.01%	-23.02%
PPHC	61 Neutral	£271.92M	-42.64	-40.39%	1.11%	15.27%	-73.02%
SFT	57 Neutral	£93.23M	-33.19	-12.90%	―	16.13%	-700.00%

Grafenia Corporate Events

Software Circle CFO Increases Stake, Signaling Confidence

Software Circle plc announced that its Chief Financial Officer, Iain Stewart Brown, has purchased 41,425 Ordinary Shares, increasing his total beneficial interest to 166,379 shares, which is 0.04% of the company’s issued share capital. This transaction reflects confidence in the company’s strategic direction and may positively impact stakeholder perception, as it aligns with Software Circle’s mission to grow through disciplined acquisitions and operational excellence.

Software Circle Reports Revenue Growth and Strategic Acquisitions in 2025 Interim Results

Software Circle plc reported a 15% increase in revenue to £10.2 million for the six months ending September 2025, driven by organic growth and strategic acquisitions. The company acquired Artificial Intelligence Finance Limited and Broker Information Services Limited, forming a new platform within its Professional and Financial Services segment. Despite a decline in its legacy Nettl Systems business, Software Circle achieved a 33% increase in operating EBITDA and a 44% rise in adjusted EBITDA. The company continues to focus on expanding its portfolio of VMS businesses, maintaining acquisition discipline, and enhancing performance through shared business systems.

Software Circle Announces Changes in Shareholdings

Software Circle plc announced changes in shareholdings following an acquisition and disposal of shares. Electa Value Capital Fund AGmvK increased its holdings to 6,782,977 shares, while P&R Real Value reduced its holdings to 49,443,143 shares due to a rise in the company’s share price and fund restrictions. The combined holdings of Electa and Abacus Value Capital Fund AgmvK now represent 7.39% of the company’s issued share capital.

Software Circle Announces Major Shareholding Change

Software Circle plc announced a significant change in its shareholdings, with Chapters Group AG reducing its stake from 83,909,908 to 38,259,908 ordinary shares, now holding 9.81% of the issued share capital. This change in shareholding could impact the company’s market positioning and stakeholder dynamics, as it continues its strategy of acquiring and managing Vertical Market Software businesses.

Software Circle Announces Significant Shareholding Change

Software Circle plc announced a significant change in its shareholdings, with Abacus Value Capital Fund AgmvK acquiring 22,043,428 ordinary shares, now holding 5.65% of the company’s issued share capital. Along with Electa Value Capital Fund AGmvK, both funds collectively hold 6.65% of the company’s shares. This acquisition reflects a strategic move that could impact the company’s market positioning and shareholder dynamics.

Software Circle Expands with Strategic Acquisition of BIS

Software Circle plc has acquired Broker Information Services Limited (BIS), a leading provider of client management and quotation software for financial brokers in Ireland, for €8.25 million. This acquisition, along with the recent purchase of Artificial Intelligence Finance Limited (AIF), forms the company’s first dedicated platform within a single vertical, enhancing its scale and diversification. The move is expected to be cash flow generative and earnings enhancing, providing opportunities for technology modernization and product expansion, ultimately aiming to deliver sustainable returns for shareholders.

Software Circle plc Sees Increased Investment from Sun Mountain Partners

Software Circle plc announced a change in its shareholdings, with Sun Mountain Partners, LLC increasing its stake to 10.34% of the issued share capital. This change in shareholding reflects a significant investment in the company, potentially impacting its market positioning and indicating confidence in its strategic direction and growth potential.

Software Circle Announces Significant Shareholding Change

Software Circle plc has announced a significant change in its shareholdings, with YOGRO GmbH acquiring 13,079,627 ordinary shares, representing 3.35% of the issued share capital. This development indicates a strategic investment in Software Circle, potentially impacting its market positioning and offering diversified exposure to stakeholders.