Wake up and smell the Daisy

Despite battling against macroeconomic headwinds, demand for Daisy's phone systems, broadband and web hosting services from companies such as Moss Bros and Trinity Mirror is proving robust. Free cash flow came in better than expected at £38.6m - up from £28.6m the year before - and, combined with new debt facilities of £200m, this provided the board with the firepower to continue acquiring new businesses while paying out a maiden dividend. Guidance is for 15 per cent annual growth in the payout over the next two years as new acquisitions drive further improvements in cash generation, although there is nothing immediate in the pipeline.

Granted, revenues from the fixed-line telephone segment continue to decline year on year as customers move towards mobile and other platforms. But Daisy is having success replacing the lost revenue with other product offerings, and cross-selling to its large customer base is helping stem the tide. A quarter of customers now take at least three products.

Analysts at Liberum Capital forecast current year adjusted free cash flow of £35.3m, underlying pre-tax profit of £45m, flat adjusted EPS of 12.9p and a 4.6p dividend. A £66.2m charge for amortisation of intangible assets, and one-off costs of £4.6m, explain the reported loss in our table.