Despite a constrained public sector market, computer systems and services specialist Scisys (SSY) is making progress. Revenues slipped - but that reflects a move away from lower-margin resale business. Yet group underlying operating profit, adjusted for such items as amortisation, jumped 13 per cent to £2.7m - helped by efficiency measures - and the operating margin improved a percentage point to 7 per cent.
Management said the government & defence division delivered "significant" growth in both fee income and operating margin - a performance that compensated for weaker figures elsewhere. Indeed, the defence side should see a big boost this year from work on the British Army's warrior armoured vehicle programme. Moreover, the media and broadcast arm, after a "pretty solid" 2012, is growing margins and should benefit from a framework radio contract with the BBC. Meanwhile, the acquisition of Germany's MakaluMedia for £1.9m will help the space division to bid for larger contracts. The application management unit managed a steady performance and the problematic environment division - which was hit hardest by UK government spending cuts - has now been refocused on shorter-term contracts. It's switching away from regulatory customers in order to work with the regulated - that's starting to bear fruit.
Broker finnCap has shaved its adjusted EPS estimate by 2.4 per cent to 8.1p for 2013, and expects adjusted pre-tax profit of £3.1m (from 6.7p and £2.4m in 2012).
Scisys (SSY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 66p | MARKET VALUE: | £19m | |
| TOUCH: | 63-68p | 12-MONTH HIGH: | 72p | LOW: 50p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 62p* | NET CASH: | £1.2m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 38.1 | -1.16 | -3.1 | nil |
| 2009 | 41.7 | 0.51 | 1.2 | 1.00 |
| 2010 | 43.6 | 1.58 | 3.4 | 1.10 |
| 2011 | 42.3 | 2.01 | 6.1 | 1.21 |
| 2012 | 39.1 | 2.03 | 5.7 | 1.32 |
| % change | -8 | +1 | -7 | +9 |
Ex-div: 12 Jun Payment: 11 Jul *Includes intangible assets of £7.4m, or 25p a share | ||||
