Yesterday, SimplyBiz Group (LON:SBIZ) announced that “Zest, its state-of-the-art, next generation employee benefits technology platform, has been selected by Benni, a new workplace service from Unum.”
Unum’s new service, Benni, offers a simple 3-step solution to employers:
employers choose which benefits they want to offer: dental insurance; medical cash plan insurance; critical illness insurance, life insurance; retail discount vouchers.
Unum then develop a tailored communication and engagement plan for each employer, with onsite one-to-one support. Employees can review and select benefits on their mobile, tablet or desktop, and access their details 24-7-365.
employers administer their benefits on Zest’s easy-to-use digital platform.
Unum Group of Companies is a market leader in employee benefits and protection products. Unum has developed Benni to provide workers direct access to a broad range of benefits alongside existing employer paid options. This has the potential to be a major client for SimplyBiz, over time.
Zeus view
Unum’s decision to contract with Zest is a huge endorsement to SimplyBiz’s decision to invest in re-platforming its Employee Benefits Software.
We expect SimplyBiz to announce another Zest contract win shortly.
As Zest has a SaaS charging structure, the impact on SimplyBiz’s revenues will depend on the activity of Unum and Zest’s other new partners’ ability to engage with employers to provide flexible benefits to their employees.
We make no changes to our forecasts in this note.
Valuation
At 196p Simplybiz is trading on a current year PER of 18.7x and PEG of 0.81x.
We expect SimplyBiz to provide investors, with higher than market earnings growth and defensive qualities. The business carries no regulated advice risk. The combination of 7% pa revenue growth, operational benefits of scale and acquisitions delivering high real double-digit shareholder returns. SimplyBiz is an attractive long-term holding: a growth stock with defensive attractions.
