Fingerprint Cards to return excess capital, sets targets
STOCKHOLM, May 4 (Reuters) - Swedish biometric company Fingerprint Cards (FPC) said on Wednesday it would return excess capital to shareholders and forecast an operating margin of at least 35 percent in 2016-2018 as it announced its first long-term financial targets.
FPC has been around for nearly two decades, but had its break-through year in 2015 as demand for fingerprint sensors in smartphones soared. Its operating margin was 31 percent last year.
The Gothenburg-based company said it aimed to have a strong balance sheet and excess capital would be returned to shareholders through share buy-backs or dividends.
Asked if it was likely FPC would start share buy-backs this year and pay a dividend for 2016, board member Lars Soderfjell said "it's possible".
"The board thinks we have a very strong balance sheet. You can see that as an indication," Soderfjell said.
FPC said it aimed for annual like-for-like revenue growth of around 60 percent for 2016-2018, after revenue growth of over 1,100 percent in 2015.
The three year target for operating margin is below its 2016 forecast of above 37 percent.
"Excellent and aggressive but yet balanced targets which motivate a strong positive share reaction," said Handelsbanken Capital Markets analyst Daniel Djurberg.
"Given our estimates, currently around 30 percent lower for EBIT (earnings before interest and tax) than FPC's target, we see a value in FPC shares of 600 crowns."
FPC stock closed at 493.1 crowns on Tuesday.
Redeye analyst Joel Westerstrom said FPC's mid-term targets were roughly in line with Redeye's estimates and came as "no big surprise", and also forecast FPC shares to rise on Wednesday.
"In our base case we had average sales growth of 55 percent and the operating margin target is fully in line with our view."
Source text for Eikon:
(Reporting by Olof Swahnberg; Editing by Sven Nordenstam and Mark Potter)
