Reported profits at IT and telecommunications recruitment group Networkers International (NWKI) were hit by a £1m provision relating to an employment law litigation case in the US - that's in addition to a previously announced £0.6m provision. Nonetheless, on an adjusted basis, pre-tax profit still rose 6.2 per cent in 2012 to £7.03m.
A 19.5 per cent increase in net fee income (NFI) at the higher-margin permanent recruitment side offset a 2.8 per cent fall contract-related NFI last year. But, as permanent placement work generates just 20.9 per cent of the total, group NFI rose by a modest 1.6 per cent overall in 2012 to £30.8m. What's more, the group's mobile telecoms division - which generates 56 per cent of NFI - experienced weaker markets in the second half of the year. But management does expect future investment in 4G networks to help boost demand going forward. Still, the group's gross margin did rise to 18 per cent from 16 per cent a year earlier and the net debt pile fell by nearly a quarter in the year.
Broker Numis Securities expects adjusted pre-tax profit for 2013 of £7.1m, giving EPS of 4.7p (4.4p in 2012).
NETWORKERS INTERNATIONAL (NWKI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 45p | MARKET VALUE: | £38m | |
| TOUCH: | 44-46p | 12-MONTH HIGH: | 47p | LOW: 34.5p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 23p* | NET DEBT: | 35% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 163 | 5.57 | 3.80 | nil |
| 2009** | 130 | 4.37 | 2.80 | nil |
| 2010 | 153 | 4.28 | 2.80 | 0.66 |
| 2011 | 190 | 6.60 | 4.20 | 1.00 |
| 2012 | 171 | 5.68 | 3.35 | 1.25 |
| % change | -10 | -14 | -20 | +25 |
Ex-div: 29 May Payment: 21 June *Includes intangible assets of £5.8m, or 7p a share **Excludes of 2.1p special dividend | ||||
