Dicom's shares surged when Reynolds Bish was appointed chief executive last November. He was formerly founder and chief executive of a rival document-management provider, Captiva, which was acquired by storage giant EMC. The honeymoon didn't last long, with fears that Mr Bish's restructuring might give competitors an opening, and that US and financial services exposure could scupper the targeted 10 per cent growth in software. But these results show Dicom remains on track, even if services, rather than licences, are generating most of the growth.
Mr Bish says he is restructuring Dicom to "get out of our own way". The sales force has been better aligned to the three divisions of applications software, software rebranded for partners (OEM) and hardware. He is rebranding, with shareholders approving a renaming to Kofax, after Dicom's main product.
And the company has been re-centralised after failing to integrate several acquisitions. That holding-company structure has also got in the way of planned share buy-backs and dividend payments, although Dicom insists that this is a short-term technical problem. Signing HP as a partner is an important step towards broadening Dicom's revenue streams and increasing market share.
Numis Securities expects full-year EPS of 14p, rising to 14.8p in 2009 (13.7p in 2007).
Dicom Group (DCM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 183p | MARKET VALUE: | £152m | |
| TOUCH: | 182-185p | 12-MONTH HIGH: | 248p | LOW: 142p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 113p* | NET CASH: | £24.4m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 78.5 | 6.02 | 4.60 | 0.71 |
| 2007 | 82.4 | 6.09 | 4.30 | 0.82 |
| % change | +5 | +1 | -7 | +15 |
Ex-div: 9 Apr Payment: 9 May *Includes intangible assets of £69.7m, or 84p a share | ||||
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