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Risk and trading software provider Patsystems has had another strong year thanks to its continued focus on emerging markets. Sales from Asia Pacific increased by an impressive 47 per cent and now account for over a third of revenues. Moreover, chief executive David Webber says sales from the region are expected to grow between 20 to 25 per cent this year.
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A "resurgence of sales" in the company's exchange systems business helped double revenues to £3m while the trading systems unit registered an 8 per cent rise in revenues to £17.6m despite the loss of £0.8m in revenue as a result of the collapse of Lehman Brothers. A reduction in business from the Tokyo Grain Exchange - as a result of legislative changes - chipped another £0.1m off sales, but Mr Webber points out that this will be offset by "other opportunities" going forward.
Annual recurring revenues - which include software provided under the software as a service model and support and maintenance revenues - remain high at 82 per cent of sales and Mr Webber adds that his company has entered the current financial year with a sales pipeline of between £8m and £9m.
Analysts at Numis Securities are expecting 2010 adjusted pre-tax profits of £4.7m and EPS of 1.8p (2009: £3.9m/1.3p).
PATSYSTEMS (PTS) |
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|---|---|---|---|---|
| ORD PRICE: | 24p | MARKET VALUE: | £43.5m | |
| TOUCH: | 23-24.75p | 12-MONTH HIGH: | 27p | LOW: 13.75p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 13p* | NET CASH: | £8.9m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 15.4 | 0.36 | 0.30 | Nil |
| 2006 | 15.3 | 1.63 | 4.90 | 0.30 |
| 2007 | 17.0 | 2.19 | 1.10 | 0.33 |
| 2008 | 19.6 | 2.07 | 0.30 | 0.36 |
| 2009 | 22.1 | 4.49 | 1.90 | 0.43 |
| % change | +13 | +117 | +533 | +17 |
Ex-div: 17 Feb Payment: 19 Mar *Includes intangible assets of £6.7m, or 4p per share |
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More analysis of company results
Routes to market in Asia and Latin America have now been established, so sales to these regions should continue to ramp up. Add to this the strong recurring revenues, and rising dividends and the shares remain good value.
Last IC view: Good value, 25p, 4 August 2009.
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