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Kofax heads for the exit

Ahead of its planned de-listing from the London market, Kofax has revealed a strong first-half performance
February 2, 2015

This may be the last UK investors see of dual-listed Kofax (KFX), whose software helps over 20,000 organisations process insurance claims, mortgage applications and other complex paperwork. The group plans to ditch its costly London listing, as close to four-fifths of its shareholders live in the US. It's leaving on a high: first-half operating profit rose 13 per cent to $4.5m (£3m).

IC TIP: Sell at 450p

The sharp statutory profit decline shown in our table reflects the absence of $4m of 'other income' stemming from currency-hedging contracts. Foreign-exchange volatility also depressed total sales by $2.7m. Investors' focus, though, is likely to be on Kofax's smart process application (SPA) products, which can make sense of digital documents on mobile devices and online. Organic sales of those rose three-quarters, driving a 13 per cent rise in software licensing sales to over $34m. That growth validates Kofax's transition away from its more staid offerings.

The gains look set to continue - buoyant demand for its new products swelled the order pipeline by over 60 per cent. Kofax also inked four million-dollar licensing deals, up from two in the six months to end-December 2013, and signed a global distribution agreement with IT services and copying giant Xerox.

Broker Jefferies forecasts full-year cash profits of $44m, giving EPS of 22¢, up from $29.6m and 12¢ in 2014.

KOFAX (KFX)
ORD PRICE:450pMARKET VALUE:£414m
TOUCH:435-452p12-MONTH HIGH:548pLOW: 353p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:269¢*NET CASH:$59m

Half-year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (p)
20131407.65.0nil
20141484.32.0nil
% change+6-43-60-

*Includes intangible assets of $247m, or 268p a share

£1=$1.50