The Deepwater Horizon and Fukushima disasters have ramped up pressure on energy companies to upgrade dated equipment and improve safety measures. Meanwhile, the demise of the National Programme for IT gives growing numbers of UK healthcare providers the power to choose their software supplier. Both trends helped Servelec (SERV), which makes patient management software as well as control systems for oil, gas and utilities companies, grow its underlying operating profit by 12 per cent in the first half.
Strong demand for its Rio and Oceano products drove an 87 per cent rise in orders at its healthcare business. So far, 12 out of 15 London-based healthcare trusts exiting the National Programme chose Servelec as their preferred supplier. And beyond the National Programme, the group has won 14 out of 18 tenders in the last three years.
Sales at its automation segment jumped 43 per cent to about £18m. That partly reflects a £5m contribution from Semaphore, a remote telemetry specialist it acquired last year. But organic growth was also strong, with underlying operating profit up 9 per cent despite the investment of £0.3m in two large pilot schemes for Severn Trent and Wessex Water.
At group level, orders were up by over four-fifths to a reassuring £29m. Broker Investec Securities expects full-year pre-tax profit of £12.2m, giving EPS of 14.5p, from £11.2m and 13.6p last year.
SERVELEC (SERV) | ||||
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ORD PRICE: | 265p | MARKET VALUE: | £181m | |
TOUCH: | 260-265p | 12-MONTH HIGH: | 296p | LOW: 179p |
DIVIDEND YIELD: | 0.6% | PE RATIO: | 16 | |
NET ASSET VALUE: | 71p* | NET CASH: | £14.6m |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2013 | 19.3 | 4.4 | 14.0 | nil |
2014 | 25.0 | 4.4 | 5.0 | 1.50 |
% change | +29 | +1 | -64 | - |
Ex-div: 24 Sep Payment: 31 Oct *Includes intangible assets of £20.7m, or 30p a share |