High-potential SMEs

Egm in the X-ray: for Allcore, revenue growth of 22% in the first nine months of 2024

The company deals with accounting planning and management. The subsidiary Irec studies an algorithm that uses the tax code to build a very thorough report

by Valeria Novellini

21 November 2024

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5' min read

Key points

Numbers
The group also uses cash for real estate transactions
The algorithm and the tax code

5' min read

Allcore means 'everything is fundamental', and indeed for the former Soluzione Tasse there is practically no activity that does not fall within this horizon, even if the core business remains tax planning and accounting management. Directly and through a number of subsidiaries, Allcore also operates in credit mediation and subsidised finance, space and membership management (promotion of real estate investments), software, credit recovery and business information, and the 'instant buying' and valorisation of real estate in Rome.

The numbers

No, it is not a multinational company. In the first 9 months of 2024, Allcore achieved revenues of 36.8 million, up 22% compared to the same period in 2023. Of this, 72.5% related to the Tax Planning and Accounts Management area (+10.3% to 26.6 million), and all areas showed an increase with the exception of the facilitated finance and credit mediation area (-38.2% to 1.4 million), which is being rationalised (in fact, Finera Srl, a benefit company, will be merged into the parent company, as will Amyralia Srl, which operates in personnel recruitment and selection, and Soluzione Meeting Srl, which operates in the business and membership areas).

Also contributing to the growth in group revenue were the 'new' activities in the debt collection and commercial information sector (for €791,000), headed by Irec Srl acquired at the end of April 2024, and in the 'instant buying real estate' sector (for €3.7m), headed by Re Business Srl acquired at the end of 2023. Excluding these two contributions, the group's revenues would have amounted to EUR 32.2m, up 6.9% from EUR 30.1m as at 30/9/2024.

For the full year 2024, Allcore has indicated target revenues of about EUR 2 million for Irec Srl and EUR 7 million for Re Business Srl (with an ebitda of EUR 1 million). The latter company, according to Allcore's management, is expected to reach revenues of 11, 18 and 25 million in 2025, 2026 and 2027, respectively, but is scheduled for an 'exit strategy' in 2027 with its sale.

In terms of profit margins, Allcore saw a 15.1% increase in turnover to EUR 22.9 million in the first half of 2024 (of which EUR 18.3 million, or 79.9% of the total, related to the Tax Planning and Accounting Management business, +8.3%), while ebitda jumped by 28.3% to EUR 2.3 million, but ebit, due to depreciation and amortisation almost doubling from EUR 627.000 to EUR 1.2 million due to the aforementioned acquisitions, dropped by 8.8% to EUR 1.08 million. However, the decrease in the tax rate from 32.6% to 24.7% resulted in a net profit increase of 3.4% to EUR 814,000.

The group also uses cash for real estate transactions

As at 30/6/2024, the company had net cash of EUR 2.7 million, down from EUR 6.3 million at the end of 2023, mainly in relation to investments in real estate made by Re Business Srl and QRE3 Srl for a total of EUR 5.1 million. These investments are expected to be paid back by the end of 2024. As at 30/6/2023 QRE3 Srl had sold 25 garages, 5 parking spaces and 1 motorbike parking space; a further 4 spaces were subsequently sold. Re Business Srl still owned 10 properties as at 30/6/2024 and had made 3 sales for 1.3 million, which rose to 3.1 million at the end of September; by the end of 2024 the total is expected to exceed 6 million.

In addition, the purchase of the shareholding in Irec Srl entailed an outlay of €383,000 and the recognition of a financial liability of €127,000, and tax credits of €425,000 were purchased at a discount of 10% - 15% that can be offset in subsequent years. It should also be mentioned that on 31/10/2024, a total dividend of approximately EUR 896,000 was distributed to shareholders.

Growth for external lines

That said, Allcore's growth by external lines does not stop. At the end of October, a binding agreement was signed for the acquisition of 51% of Dale Carnegie Italia Srl, the Italian licensee of the brand of the US multinational Dale Carnegie & Associates Inc. active for over a century in management training. The estimated amount amounts to 918,000 euro, of which 720,000 will be paid in four annual instalments between 2025 and 2028. As of 31/5/2024, the target company had a production value of EUR 1.07 million and an ebitda of EUR 327,000.

To finance the operation Allcore announced the issuance of one of the rare minibonds on the Euronext Growth Milan, admitted, however, to trading on the MTF market in Vienna, in the amount of up to a maximum of EUR 2 million (can be subscribed until 31/1/2025) with an initial maturity in 2026 that can be extended until 2033. However, the rate is very high (10%). It will not affect the 2024 financial balance, but could have a significant impact on the final result of the next financial year.

The algorithm and the tax code

Hence the need to optimise the group's structure and costs, and the strategy adopted includes the centralisation of financial functions in a single department, the digitalisation of processes, the adoption of an Erp system (already implemented) as well as the launch of new services such as 'Tutoring Evolution' alongside the 'Soluzione Tasse' brand (offering management control services provided by the professionals of the Amyralia brand) and 'Allgrowth' (packages combining networking services for entrepreneurs, corporate finance, training and strategic consulting), intended to strengthen the offer in the subsidised finance and credit mediation sector.

The already announced mergers are expected to lead to cost savings of 220,000 euro in 2024 and 540,000 euro annually from 2025, while for the 'Tutoring Evolution' service the 2024 revenue estimate is 800,000 euro (1.9 million estimated in 2025 plus possible upselling for 1.5 million) and for 'Allgrowth' the 2024 estimate is 500,000 euro and 1.5 million in 2025 plus possible upselling for 826,000 euro.

The subsidiary Irec Srl is developing a algorithm called 'K-Score' based on artificial intelligence, which will be able, through the tax code, to produce reports that include predictive behavioural analysis, socio-economic data with geo-localised analysis that updates the score according to the area of residence, any real estate in the name and its real value based on the average market value in the area, any positions and holdings in companies and any negatives such as protests. A bit 'Big Brother' indeed. To broaden the customer base, on the other hand, the 'Allcore Ambassador' project will be launched, which aims to create a physical network of professionals able to bring SMEs closer to the company's offer.

Since the end of November 2023, Allcore has become an 'issuer of financial instruments that are widely circulated among the public' (more than 500 shareholders other than the reference shareholders) and has a rather high free float for a company in the Euronext Growth Milan (about 31.9 per cent of the share capital). But trading of the stock is very low and discontinuous. The company has numerous marketing initiatives in place, including the Quantico membership club reserved for SME entrepreneurs (to whom, among other things, the real estate investments of the subsidiary QRE 3 Srl are reserved after QRE2 Srl, already closed), presentation tours, numerous training events throughout Italy dedicated to entrepreneurs and recently to the network of private bankers Fideuram (Intesa Sanpaolo group), as well as the presence on social media Meta (Facebook) with advertising campaigns and lead generation strategies.

But Allcore, if known by customers and business partners, is much less so in the financial market. From an ESG point of view, the company adopts a system of environmental sustainability monitoring and efficient resource management, but does not draw up a sustainability report for the time being, even though, given its rapid growth by external lines, it should soon fall under the compulsory requirements of the CSRD. It does, however, promote sustainability initiatives through the Allcore Foundation, which organises art auctions, fundraisers and charity sports tournaments.