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WANdisco makes encouraging progress

The technology group signed exciting new deals and reduced its cost base
March 13, 2017

WANdisco (WAND) was valued at almost £15 a share in 2013, before plummeting to somewhere around 80p. The reason for this drastic change in fortunes, which nearly saw the software group become a footnote in tech history, was a lack of maturity in the big data market and an insufficient product offering, according to boss David Richards.

IC TIP: Hold at 497p

The launch of Fusion, WANdisco's patent-protected software that enables data to be moved securely between computing environments, is expected to change this, particularly as adoption of cloud technology has since strengthened dramatically. In 2016, WANdisco inked new deals with the likes of Hewlett Packard and established a partner network with IBM, Oracle and Amazon. These agreements, which helped to trigger a 72 per cent jump in new sales bookings to $15.5m (£12.7m), increased the group's credibility, improved access to key blue-chip customers and reduced costs.

Higher revenue and the support of multinational sales teams also resulted in a significant decrease in cash consumption over the year. Overheads were cut by a third to $23.4m, helping WANdisco to more than halve its adjusted cash profit loss to $7.5m.

Broker Stifel expects an adjusted EPS loss of 39¢ per share in 2017, compared with a loss of 53¢ per share in 2016.

WANDISCO (WAND)
ORD PRICE:497pMARKET VALUE:£175m
TOUCH:496-498p12-MONTH HIGH:535pLOW: 95p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:11¢*NET CASH:$7.6m

Year to Dec 31Turnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
20126.0-8.0-49.0nil
20138.0-20.0-90.0nil
201411.2-39.4-159nil
201511.0-31.0-104nil
201611.4-10.0-28.0nil
% change+4---

*Includes intangible assets of $6m, or 17¢ a share £1=$1.22