Lower re-selling revenues dragged down full-year revenues at IT service group Scisys, but favourable changes to research and development tax credits led to a dramatic increase in EPS to 6.1p on a 14 per cent rise in underlying profitability. Despite less of a tax boost expected in 2012, analysts at Cannacord Equity are still forecasting 2012 underlying EPS of 7.2p on the back of a £0.5m rise in operating profit to £2.9m.
Last year professional services fees, which are sales garnered from services directly delivered by Scisys, grew 11 per cent to £36.9m. Direct services command higher margins, and as such adjusted operating margins edged closer to management's target of 7 per cent, having advanced to 6 per cent, from 5.1 per cent last year. The company started 2012 with a higher level of orders than at this stage last year.
Divisionally, the space division has returned to profitability, largely as a result of restructuring efforts while the broadcast media business also remained solid on the back of the £15m BBC contract, signed in 2010. Tightened government budgets weighed on the environment division, although chairman Mike Love says the business is working to diversify revenue streams with more than half of sales now derived from outside the UK, a trend that is likely to continue.
SCISYS (SSY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 53p | MARKET VALUE: | £15.3m | |
| TOUCH: | 51-55p | 12-MONTH HIGH: | 57p | LOW:42.5p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 58p | NET DEBT: | nil | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 25.6 | -2.60 | -12.5 | nil |
| 2008 | 38.1 | -1.16 | -3.1 | nil |
| 2009 | 41.7 | 0.51 | 1.2 | 1.00 |
| 2010 | 43.6 | 1.58 | 3.4 | 1.10 |
| 2011 | 42.3 | 2.01 | 6.1 | 1.21 |
| % change | -3 | +27 | +79 | +10 |
Ex-div: 6 Jun Payment: 5 Jul *Includes intangible assets of £5.9m, or 20p per share | ||||
