Shares in telecoms provider Daisy Group (DAY) have more than doubled this past year. While they no longer offer as much in the way of value, they're worth holding on to. That's because demand for Daisy's phone systems, broadband and web hosting services remains robust despite macroeconomic and regulatory headwinds, and the business consistently generates impressive amounts of cash.
Cash profits increased 2 per cent in the first half to £27.8m, with Daisy's gross profit margin rising to 39 per cent from 36 per cent, helped by an improvement in the product portfolio mix. Revenues from fixed-line telephony continue to decline, but a number of new acquisitions and cross-selling to the existing large customer base more than made up the slack. The telecoms provider has around £100m of room in its debt facilities for further acquisitions.