Meagre budgets and rising costs have forced the NHS and other healthcare providers to seek out cost savings. More and more are turning to Allocate Software (ALL), which helps organisations manage their employee rosters and comply with government regulations. Rising demand helped Allocate increase cash profits – adjusted for one-off costs – by 44 per cent to £6.9m.
Its healthcare sales rose 18 per cent to £34.7m as it signed up 16 new customers to its flagship HealthRoster application, taking its total base to 165 of 272 NHS trusts. It also secured 33 new agreements for its SafeCare software, which ensures an adequate number and mix of staff are assigned to each of a hospital’s wards at all times. And its Allocate Cloud product more than doubled its user base to 63 clients.
The company's prospects look strong, with healthcare bookings – an indicator of future sales based on contracts signed - exceeding healthcare revenues by nearly a fifth. Growth in this division should continue to offset problems in the much smaller defence and maritime segments, where combined sales fell nearly a third to £5.3m last year.
Allocate’s shift from upfront sales to recurring revenue prompted broker Numis to trim its forecasts by about 4 per cent. It now expects cash profits of £7.4m this year, giving EPS of 8.6p.
| ALLOCATE SOFTWARE (ALL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 117p | MARKET VALUE: | £ 80m | |
| TOUCH: | 115-118p | 12-MONTH HIGH: | 119p | LOW: 84p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 28p* | NET CASH: | £13.7m | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 22.0 | 1.3 | 2.4 | nil |
| 2011 | 30.1 | 0.7 | 1.3 | nil |
| 2012 | 36.6 | -4.5 | -5.4 | 1.20 |
| 2013 | 37.1 | -2.4 | -2.3 | 1.32 |
| 2014 | 40.0 | 2.9 | 5.2 | 1.45 |
| % change | +8 | - | - | +10 |
Ex-div:tba Payment:tba *Includes intangible assets of £10.5m, or 15p a share | ||||
