"I accept there's been a certain amount of ups and downs in the last couple of years," says nCipher chief executive Alex van Someren, "but under it all there's a business that can really deliver in the face of adversity." While the succession plan for Mr van Someren remains unclear after Netstore chief Neil Lloyd turned down the job for "personal reasons", more news on that front is expected in the second half.
Abridean, the cash-consuming subsidiary that prompted the most serious problems, posted a first half reduced loss of £0.2m, and there are plans to strengthen its balance sheet. And the component shortage flagged in May was swiftly resolved by stockpiling inventory (with the corresponding hit to working capital).
And so, finally, to the underlying business. On constant currencies, nCipher's sales grew 24 per cent in the first half, with the new KeyAuthority product and related services notching up £0.7m of sales - as much as some analysts had expected in the whole year. Gross margin was also well ahead of forecasts at 85 per cent, though Mr van Someren makes no apologies for increasing R&D spend by 15 to 20 per cent in the second half.
Charles Stanley expects full-year adjusted EPS of 11.6p, rising to 19.2p in 2008 (2006: 9.7p).
nCipher (NCH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 229p | MARKET VALUE: | £ 38m | |
| TOUCH: | 227-230p | 12-MONTH HIGH: | 290p | LOW: 214p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | 50p | NET CASH: | £9.4m | |
| Half-year to 30 Jun | Turnover (£m) | Pretax profit (£m) | Earnings per share (p) | Net div per share (p) |
|---|---|---|---|---|
| 2006 | 10.4 | 0.72 | 1.7 | nil |
| 2007 | 12.1 | 2.05 | 4.6 | nil |
| % change | +16 | +185 | +171 | - |
Click for a guide to the terms used in IC results tables.
