19 October 2016 – trading update
The software and IT services business has issued a trading statement covering the year to 30 September with pre-tax profits expected to be in line with expectations although revenue was somewhat higher than forecast. Revenues are forecast to be 10% higher at £21m with profits likely to be £3.4m compared with £3.2m the year before. This would give earnings per share of 5.1p with the dividend for the year expected to be 2.3p per share. Net cash at the year end was £4.3m providing ammunition for acquisitions should suitable opportunities arise. Sales order intake during the year was over £12m compared with £10m in the previous year, with over £3.8m of orders from new customers compared with just £2.0m in the previous year. This is clearly a positive as the group looks to expand its customer base. Pre-contracted recurring revenues increased to £10.8m (2015: £9.9m) representing over 50% of revenues. Further growth is forecast for the current year, with pre-tax profits likely to be £3.6m for earnings per share of 5.2p and the shares are good value. BUY.