Iomart's decision to sell its non-core business - online directory, Ufindus - in order to focus on managed hosting operation, is starting to bear fruit. Both customer numbers and utilisation rates are up and management are keen to use its newly-acquired cash pile to make acquisitions.
The group added 30 customers during the first-half, taking its total customer numbers up to 90, and utilisation rates have inched up to 22 per cent (from 19 per cent at the full-year stage). Moreover, revenue from web-hosting business, Easyspace, rose 18 per cent, while sales from managed hosting division, Iomart Hosting, recorded a fourfold increase - although management point out this is still a fledgling operation. Management also say that the pipeline is strong, with 85 per cent of revenues already booked or contracted "at any given time".
The sale of Ufindus to BT generated a net gain of £12.6m, giving management the financial fire-power to make acquisitions that will bolster scale. There are also plans to reinstate the full-year dividend - after a two-year hiatus - at the end of this financial year. Investec Securities expects full-year pre-tax profits of £11.6m, giving EPS of 11.5p (2008: 0.3p).
IOMART GROUP (IOM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 35p | MARKET VALUE: | £34.6m | |
| TOUCH: | 33-36 | 12-MONTH HIGH: | 52p | LOW: 31.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 35p* | NET CASH: | £13.7m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Net dividend per share (p) |
|---|---|---|---|---|
| 2007 | 3.61 | -1.40 | -0.99 | nil |
| 2008 | 5.70 | -0.71 | -0.65 | nil |
| % change | +58 | - | - | - |
*Includes intangible assets of £16.8m, or 17p per share | ||||
