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Avast gets remote working boost

Paying customers surpassed 13m
August 12, 2020

Avast’s (AVST) adjusted cash profits nudged up 2 per cent in the six months to June, as a mass shift to remote working supported the cybersecurity company’s core consumer desktop business. 

IC TIP: Buy at 569p

More people working from home led the software group to surpass 13m paying customers, adding 640,000 in the period. Avast also managed to squeeze more sales out of each user, with average revenue per customer nudging up 0.7 per cent to $51.40 (£39.45). But management tempered its outlook for the remainder of the year, flagging that it believes the uplift in demand will not endure over the long term, at least not fully.

Meanwhile, the consumer indirect segment was hurt by lower levels of digital advertising, leading to softer-than-expected performance in the group’s Secure Browser segment. In small-to-mid-sized businesses, adjusted revenues (excluding disposals) dropped 7 per cent – although it only represents a relatively small proportion of the group total. 

Management noted that the winding-down of Jumpshot – the subsidiary that had been accused of selling browser history data – is on schedule and within budget. 

Analysts at UBS forecast revenues of £879m in the 2020 full year, rising to £928m in 2021.

AVAST (AVST)    
ORD PRICE:569pMARKET VALUE:£5.9bn
TOUCH:568-570p12-MONTH HIGH:600pLOW: 271p
DIVIDEND YIELD:1.7%PE RATIO:32
NET ASSET VALUE:111¢NET DEBT:72%
Half-year to 30 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
201942514412.04.4
20204331159.04.8
% change+2-20-25+9
Ex-div:10 Sep   
Payment:16 Oct   

*Includes intangible assets of $2.1bn, or 208p a share

£1=$1.3