These half-year figures mark the rebirth of Regenersis (RGS) as a 'pureplay' software business, although the substantive financial implications of the transition won't become fully apparent until later this year. In February, the group confirmed that it was hiving off its repair services business in order to focus on Blancco, its key data erasure business, which has identified "a $2bn (£1.4bn) market opportunity".
Comparative metrics from a year ago aren't particularly illuminating due to the change in business mix and the group's adoption of IFRS accounting for subscription sales. Revenues and reported operating profits fell in the wake of the accounting change, while headline operating cash flows were lower due to the removal of discontinued cash flows during the period. However, the group's cash conversion rate went into orbit due to a surge in the amount of cash collected in advance of revenue recognition. Perhaps a more meaningful indicator of how the group is performing is provided by invoiced sales figures from Blancco, which show a 40 per cent growth rate at constant currencies.
Last year's transformation also involved relocating the group's headquarters to Atlanta, Georgia to tap into the world's pre-eminent IT market, a process given added impetus by the September acquisition of the Tabernus business group, a privately owned provider of software erasure. Regenersis was also awarded industry-first patents for solid-state drive erasure, and launched an integrated mobile erasure-and-diagnostics product.
Panmure Gordon expects adjusted cash profits of £6.1m, leading to EPS of 5.2p, against £4m and 3.1p in 2015.
| REGENERSIS (RGS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 194p | MARKET VALUE: | £153m | |
| TOUCH: | 190p-198p | 12-MONTH HIGH: | 237p | LOW: 138p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | NA | |
| NET ASSET VALUE: | 153p* | NET DEBT: | 7% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 (restated) | 6.8 | -2.2 | -2.83 | 1.65 |
| 2015 | 9.9 | -0.3 | -1.18 | 0.66 |
| % change | +46 | - | - | -60 |
Ex-div: 12 May Payment: 17 Jun *Includes intangible assets of £63.6m, or 81p a share | ||||
