23 July 2019 – interim results and contract win

Interim results covering the six months ended 31 May 2019 have been released.  Revenue slipped from £34.7m to £33.6m and profit before tax was £1.2m versus £1.5m in the same period a year earlier.  However, diluted earnings per share were 6.1p (2018: 5.9p) and with stronger performance anticipated in the second half an interim dividend of 1.3p per share was declared (2018: 1.2p).  This is supported by a strong order book and a net cash position of £5.3m at the period end.  The company has also been awarded a multi-million euro contract to enable smart, centralised management of network-wide safety, service and security processes for S-Bahn Berlin GmbH, a subsidiary of Deutsche Bahn AG, which is responsible for delivering and modernising rail provision in Berlin.  Development and delivery of the solution will take place over two years and the contract also includes an eight-year support agreement as part of a long-term partnership.  On balance we believe that the shares are a BUY.