This weak half-year performance from document management software specialist Kofax (KFX) demonstrated just how sensitive the company is to the tough economic conditions in Europe and the US. Management issued a profit warning for the full-year to end-June 2013, with adjusted cash profits set to be 10 per cent below end-June 2012's $48.5m (£30.7m) on revenues that are expected to deliver no more than low single-digit growth.
Kofax's mix of relatively stable maintenance contracts and more volatile royalty earnings worked against it in the period - the sales fall was mainly caused by a 21 per cent, or $12m, slump in license fees generated by Kofax's main core capture software products. Business in the Americas was especially hard hit and sales there fell 5 per cent year-on-year to $67.1m, although the Europe, Middle East and Africa operations also saw sales fall 2.7 per cent to $47.7m. The Asian operations, however, grew sales by 2.2 per cent to $9m. There were some signs of resilience at group's maintenance services operations, too, where sales rose 6.3 per cent to $60.7m, helped by the acquisition of Singularity in December 2011.
Broker Investec Securities' forecasts are under review but, prior to these results, the broker was expecting full-year pre-tax profit of $46.3m, giving EPS of 34.9¢ (2012:$42.7m/31.8¢).
KOFAX (KFX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 281p | MARKET VALUE: | £252m | |
| TOUCH: | 275-280p | 12-MONTH HIGH: | 336p | LOW: 237p |
| DIVIDEND YIELD: | nil | PE RATIO: | 34 | |
| NET ASSET VALUE: | 252¢* | NET CASH: | $87m | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 124 | 11.5 | 8.00 | nil |
| 2012 | 129 | 2.07 | nil | nil |
| % change | +4 | -82 | -100 | - |
Ex-div:- Payment:- *Includes intangible assets of $178m, or 199¢ a share £1=$1.58 | ||||
