15 May 2012 – interim results
The six months to 31 March have seen the software and IT services group make further progress. Although revenues for the period on continuing operations declined slightly to £6.1m (2011: £7.0m), operating profit increased by over 6% to £0.80m (2022: £0.75m). Pre-tax profits before exceptionals were £640,000 (2011: £365,000) although a higher tax charge meant that earnings per share declined to 0.4p (2011: 0.6p). The period saw the disposal of Sanderson RBS for £11.75m and this has transformed the balance sheet so that the group now has net cash of £3.56m with all borrowings having been repaid. The interim dividend has been raised by 66% t0 0.5p (2011: 0.3p). The group is now focused on higher growth, higher margin operations and we expect full year pre-tax profits to come in at £1.8m for earnings per share of 3.8p. The group is also expected to be cash generative and, in the absence of any acquisitions, the net cash balance is likely to rise to around £5m. The group has a strong order book and with any acquisitions set to be earnings enhancing profit forecasts could be increased going forward. We maintain our BUY rating with a share price target of 49p.