There's no disguising the fact that 2012 was a disappointing year for KBC Advanced Technologies (KBC) , particularly as the energy software and consultancy specialist was forced to temporarily halt dividend payments. However, the company did benefit from a marked increase in fourth-quarter activity, and a 45 per cent increase in revenues from its Technology division. KBC ended the year with a record order backlog of £82.9m (£48.7m in 2011) and secured a five-year multi-million dollar contract with Japanese refiner TonenGeneral Sekiyu.
KBC did manage to record strong revenue growth through 2012, partly due to increased demand for software and related services, although consulting revenues also ticked up by 4 per cent. However, the good work was undone by a 17 per cent hike in costs, which meant that operating profits fell from £5m to £3.86m. KBC was also hit by a £5.31m (£1.67m in 2011) tax charge brought about by an increase in work completed in higher-tax jurisdictions, together with a decision to recognise a subsidiary's deferred tax charge.
During the year, KBC enhanced its software offering through the strategically important acquisition of Infochem for £9.5m. In response to a poor first-half performance, KBC initiated a number of restructuring measures with a focus on delivering cost efficiencies, and driving higher-margin software sales.
Broker Cenkos anticipates current year adjusted pre-tax profits of £7m, EPS of 8p and a reinstated dividend of 1.6p a share (from £5.3m and 5.9p in 2012).
| KBC ADVANCED TECHNOLOGIES (KBC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 65p | MARKET VALUE: | £38m | |
| TOUCH: | 64-66p | 12-MONTH HIGH: | 83p | LOW: 42p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 53p* | NET CASH: | £13.3m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 52.8 | 5.39 | 6.4 | 1.35 |
| 2009 | 52.6 | 4.61 | 5.4 | 1.55 |
| 2010 | 53.1 | 3.65 | 4.0 | 1.85 |
| 2011 | 55.7 | 4.93 | 5.9 | 2.25 |
| 2012 | 63.1 | 3.66 | -2.9 | nil |
| % change | +13 | -26 | - | - |
*Includes intangible assets of £24.9m, or 42p a share | ||||
