Good help is hard to find and even harder to keep. That explains why clients of IT services group FDM (FDM) lined up to employ its highly-trained consultants last year - known as 'Mounties' - driving its adjusted operating profit up a tenth to £24.9m.
FDM, which was taken private in 2010 then rejoined the London market last summer, recruits and trains local graduates in skills such as 'big data' analysis and cybersecurity, then places them with clients for at least two years. Prodigious demand meant it deployed over 1,500 such Mounties last year - a 32 per cent rise - and opened combined academy and sales facilities in Toronto and Glasgow. It also diversified its client base away from investment banking; it inked contracts with Coca Cola, Jaguar Land Rover and National Grid.
Mountie revenues rose a fifth to about £89m, reflecting 15 per cent growth in the UK and Ireland and even stronger growth in North America and Asia Pacific. FDM plans to further broaden its market and bolster capacity by opening an office in Leeds this year, and potentially a new academy in Singapore. FDM's focus on Mounties rather than freelance contractors bodes well for its margins, while increased recruitment of local ex-military personnel should combat seasonal variations in client budgets and graduate recruitment.
Broker Investec Securities expects 2015 pre-tax profit of £28.5m, giving EPS of 20.2p (from £24.4m and 17.5p in 2014).
| FDM (FDM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 364p | MARKET VALUE: | £391m | |
| TOUCH: | 362-364p | 12-MONTH HIGH: | 372p | LOW: 287p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 40p* | NET CASH: | £12.3m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | na | na | na | na |
| 2011 | 97 | 11.8 | na | na |
| 2012 | 103 | 15.9 | na | na |
| 2013 | 106 | 19.9 | 14.1 | na |
| 2014† | 123 | 19.0 | 12.7 | 7.5 |
| % change | +17 | -5 | -10 | - |
Ex-div: tba Payment: tba *Includes intangible assets of £19.4m, or 18p a share †FDM relisted in June 2014 | ||||
