Statutory profits were shackled through prudential accounting, but double-digit sales growth and a 12 per cent rise in adjusted operating profits to £37m demonstrates that Emis Group (EMIS) continues to make steady inroads in the healthcare software market.
The Aim-listed group's progress is derived from a mix of organic and acquisitive growth, but the latter avenue occasionally has its drawbacks. The fall-away from the top line through to full-year earnings rests largely with a £16.2m impairment on the carrying value of goodwill arising on the Ascribe acquisition made in 2013. A smaller non-cash charge was also made against the group's minority investment in Pharmacy2U, held since 2005. The Ascribe write-down highlights the challenges faced by the secondary care segment, though management expects that financial performance is set to improve on the back of operational improvements put in place recently.
A slight pull-back in net cash flow demonstrates that neither the group's working capital demands nor its progress on receivables could ever be described as linear; a point brought home by the unfavourable timing of payments and issues linked to deferred NHS income balances. However, these are temporary effects and the lag should feed through into 2016 cash flows.
N+1 Singer expects adjusted profits of £39.6m, leading to EPS of 49.1p.
| EMIS GROUP (EMIS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,052p | MARKET VALUE: | £666m | |
| TOUCH: | 1,052p-1,058p | 12-MONTHHIGH: | 1,176p | LOW: 850p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 146 | |
| NET ASSET VALUE: | 164p* | NET DEBT: | 9% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 73.0 | 21.4 | 28.7 | 12.4 |
| 2012 | 86.0 | 24.1 | 32.5 | 14.2 |
| 2013 | 106 | 24.6 | 32.6 | 16.0 |
| 2014 | 138 | 28.5 | 35.3 | 18.4 |
| 2015 | 156 | 10.9 | 7.2 | 21.2 |
| % change | +13 | -62 | -80 | +15 |
Ex-div: 31 Mar Payment: 29 Apr *Includes intangible assets of £121m, or 192p a share. | ||||
