There is a decent chance of a return to those highs and beyond if the latest trading news is anything to go by. The forthcoming results for the six months to end March 2016 are scheduled for release on Wednesday, 8 June 2016 and will highlight an 11 per cent increase in revenues to around £10m and a near 10 per cent rise in operating profit to £1.5m over the same period in 2015. Sales order intake of £6m is 20 per cent higher year-on-year and includes £2m of contract wins from new customers, more than that achieved during the whole of the previous financial year and up from £1.5m when I updated the investment case a couple of months ago. The closing order book of £3.2m at the end of March is almost 13 per cent ahead on 12 months earlier, so there is clear sales momentum coming through.
Moreover, over half of revenues are recurring (pre-contracted for at least 12 months), so there is a high level of repeat business which gives investors confidence in the company’s ability to lift full-year revenues by £1.2m to £20.4m as analysts at analysts at research firm GECR predict. On this basis, expect pre-tax profits to rise by about 9 per cent to £3.46m in the 12 months to end September 2016, generating a double digit rise in EPS to 5.6p and supporting a near 10 per cent hike in the dividend per share to 2.3p. That payout is supported by strong cash generation as the company ended the half year with net funds of £3.4m, worth 6p a share, even after paying out more than £1.5m of deferred consideration on previous acquisitions, around £657,000 on the final dividend of 1.2p a share paid in mid-March, and further planned investment in management, sales and delivery capacity for its fast growing digital retail software business.