Chief executive Ian Bowles of workforce optimisation software specialist Allocate Software says he is confident his company will report "fantastic" full-year results. This may be rather perplexing for investors trying to get a handle on the latest figures from the company given that cash profit more than halved to £1.6m on flat revenues. And that's before a raft of one-off items dented the reported numbers, which included a £3.9m hit on the carrying value of its Dynamic Change business due to the loss of Primary Care Trust customers following government reforms. Allocate also booked £1.3m in acquisition costs.
Still, there were enough positives for analysts at Numis Securities to have kept their full-year adjusted pre-tax profit forecasts unchanged at £5.7m, giving EPS of 7p (£5.2m and 6.2p in 2011). Firstly, underlying organic revenues, excluding acquisitions and last year's large Australian healthcare contract, increased by 15 per cent. And the NHS business is looking healthy enough with 11 new NHS Trusts secured in the period and another three trusts extending contracts.
The strongest growth came from the company's defence business with sales surging 50 per cent to £2.4m, and the unit has secured an extension of a multi-million pound deal with the Australian Defence Force post the period-end. Encouragingly, recurring revenues are storming ahead and now represent almost half of the total sales.
ALLOCATE SOFTWARE (ALL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 79p | MARKET VALUE: | £49.8m | |
| TOUCH: | 78-80p | 12-MONTH HIGH: | 89p | LOW: 65p |
| DIVIDEND YIELD: | nil | PE RATIO: | 12 | |
| NET ASSET VALUE: | 22p* | NET CASH: | £27,000 | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 15.9 | 1.18 | 1.43 | nil |
| 2011 | 16.0 | -6.57 | -8.49 | nil |
| % change | +1 | - | - | - |
*Includes intangible assets of £18.9m, or 30p a share | ||||
