Here’ why the Elixirr share price just went vertical

Elixirr (LON: ELIX) share price went vertical on Monday after the company published strong financial results. The thinly-traded stock soared to a high of 504p, which was a few points above the year-to-date low of 416p. It was the best-performing FTSE AIM 100 constituent stock.

Strong financial results

In a note on Monday, Elixirr International said that its revenue for the last financial year will be about £70.7 million. This will be a significant increase from the previous year’s £50.6 million. 

The company also said that its adjusted EBITDA will come in at about £20.5 million while its adjusted EBITDA margin came in at 29%. It ended the year with about £20.4 million with no debt. In a note, the company’s CEO said:

“The turbulent macroeconomic backdrop and our strategic purchases have made Elixirr’s services even more relevant at a board level as we help our clients to navigate the changing business environment. The momentum we have delivered in 2022 is accelerating in 2023, and we expect further growth across all our pillars as the year progresses.”

For starters, Elixirr is a consulting company that provides its services to some of the biggest companies globally. Its services include business strategy, mergers and acquisitions, data strategy, procurement, and digital marketing among others. Some of its key customers are firms like Farfetch, Honeywell, and Lincoln Financial Group.

UK merger boom expected

The other reason why the Elixirr share price jumped is a new report by the Financial Times. According to the report, many FTSE 250 companies expect more deal-making, especially from moneyed private equity companies.

Demand for UK companies is mostly because of the compressed valuations in the market, mostly because of Brexit. We have seen some of these takeover bids already. Last week, I wrote that Wood Group has been approached by Apollo Group.

Meanwhile, PE firms have a lot of dry powder to deploy. In a report by the WSJ, analysts believe that private equity deals will rebound in the second half of the year. These funds are sitting on $3.7 trillion in dry powder. As such, Elixirr International’s share price could do well as this consolidation continues.