The cost of data erasure company Blancco Technology 's (BLTG) refocusing as a 'pure play' software business has been bruising. The group formerly known as Regenersis has been buying minority stakes in joint ventures around the globe in order to maximise access and cross-selling opportunities in overseas markets. Buying out other investors in its businesses in Australia, France and elsewhere cost the company £1.3m in M&A-related costs. Restructuring exceptionals cost a further £487,000. All this contributed to an increased loss before tax, and the share price fell a fifth in response to these numbers.
However, there are signs of improvement. Organic sales growth was at 21 per cent at constant currencies. The group's principal service, which helps businesses securely erase data, grew 11 per cent on an organic basis.
Blancco has been using shared equity arrangements to open new sales offices overseas. It recently opened new offices in China and Singapore, while the business in North America now accounts for 42 per cent of revenue, and the plan is to grow this proportion to 50 per cent.
Analysts at Peel Hunt are forecasting adjusted pre-tax loss of £1.3m in 2017, and EPS of 9.5p (from a £1.3m loss and EPS of 5.6p in 2016).
BLANCCO TECHNOLOGY GROUP (BLTG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 239p | MARKET VALUE: | £139m | |
| TOUCH: | 238-240p | 12-MONTH HIGH: | 308p | LOW: 172p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 73p* | NET DEBT: | 13% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 9.9 | -0.3 | -1.18 | 0.66 |
| 2016 | 14.2 | -1.08 | -3.70 | 0.70 |
| % change | +43 | - | - | +6 |
Ex-div: 11 May Payment: 16 Jun *Includes intangible assets of £66m, or 114p a share | ||||
