FDM (FDM) saw its share price rocket on Monday, after reporting a particularly strong performance for the first half with a significant boost to its top-line and pre-tax profit. The IT consultancy continued to expand overseas: North America revenues from its 'Mounties' workforce rose 56 per cent to £36.9m. The company, which joined the FTSE 250 in June, has increased the half-year dividend by more than a quarter and said full-year results will be “comfortably ahead of its previous expectations”.
FDM continues to focus on “growing Mountie headcount and Mountie revenue”. Mounties are effectively employees who FDM recruits and trains in specialist IT services, such as cyber security, before placing them with clients. Mountie revenues rose by 31 per cent to £101m, constituting 86 per cent of the group’s top-line. Lower-margin revenue from self-employed contractors also increased, which led to a reduced gross margin of 43 per cent, from 46 per cent.
Regionally, the UK and Ireland contributed the most Mountie revenue, but the Asia-Pacific area saw the strongest growth, helped by the opening of the Singapore Academy and sales office. Meanwhile, North America’s top-line improvement stemmed from new client wins and the development of existent client relationships. Cash conversion fell slightly from 101 per cent to 97 per cent.
Analysts at Investec forecast pre-tax profit of £44.8m and EPS of 30.7p for FY2017, up from £37.5m and 25.7p, respectively, in 2016.
| FDM (FDM) | ||||
| ORD PRICE: | 970p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 964p-970p | 12-MONTH HIGH: | 1,015p | LOW: 513p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 55p* | NET CASH: | £29.3m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 86.5 | 15.5 | 10.7 | 9.3 |
| 2017 | 117.1 | 20.6 | 14.0 | 12.0 |
| % change | +35 | +33 | +31 | +29 |
| Ex-div: | 24 Aug | |||
| Payment: | 22 Sep | |||
| *Includes intangible assets of £19.3m, or 18p a share | ||||
