No surprises, bad or otherwise, at the full-year mark for Servelec (SERV) as the software provider produced results in line with last June's profit warning. At the time, chief executive Alan Stubbs revealed that some end markets, notably those linked to the NHS and water utilities, were "challenging and timing of order entry has become a short-term issue".
The controls segment bore the brunt of these procurement delays. This contributed to a 25 per cent fall in the division's revenues to £10.8m, while underlying profits more than halved to £1.5m. Performance at its controls unit started to pick up towards the end of the year, but adjusted group profits, ex-amortisation and non-recurring items, still pulled back by 27 per cent to £9.8m.
There was a mixed picture at the rebranded Servelec's HSC division, which provides electronic records and administration for the healthcare and education sectors, with a slight uptick in the social care market set against a decline in margins and overall order intake. Servelec points out there is a "strong indication from NHS Digital that further funding will be announced in 2017" to comply with the drive towards a paperless NHS by 2020.
Investec expects adjusted pre-tax profits and EPS of £17.8m and 19.9p this year, from £14.4m and 16.1p in 2016.
| SERVELEC (SERV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 291p | MARKET VALUE: | £203m | |
| TOUCH: | 285p-297p | 12-MONTH HIGH: | 393p | LOW: 208p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 100p* | NET DEBT: | 14% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 39.4 | 10.9 | 33.0 | nil |
| 2013 | 42.0 | 10.9 | 26.1 | nil |
| 2014 | 51.8 | 10.6 | 12.7 | 4.50 |
| 2015 | 63.1 | 13.4 | 17.1 | 5.15 |
| 2016 | 61.0 | 9.5 | 11.1 | 5.65 |
| % change | -3 | -29 | -35 | +10 |
Ex-div: 4 May Payment: 26 May *Includes intangible assets of £69.3m, or 99p a share | ||||
