“It’s really about momentum, momentum, momentum,” says FDM’s (FDM) chief executive Rod Flavell: an accurate summation of the IT group’s strong 2017 results. Solid top-line growth largely stemmed from a 24 per cent rise in ‘Mountie’ revenue – pertaining to sales generated by FDM employees, who have been specially trained and placed with client organisations. The company continued to invest in its Mountie training academies, and raised Mountie headcount by 17 per cent during the year. Even with this expenditure, ‘momentum’ endured further down the income statement, triggering a 7 per cent rise in the company’s share price.
The UK and Ireland, which generates roughly half of group sales, won 43 new clients in 2017. Signalling greater revenue diversification, more than three-quarters of these came from outside the financial services industry. Meanwhile, management says the North American segment is now the same size as FDM in its entirety when it went private in 2009. Mountie revenue there rose 36 per cent to £73.8m, with 12 new client wins. Beyond Mountie revenues, contractor sales climbed 19 per cent due to specific customer needs in the first nine months of 2017. These lower-margin revenues should decline going forward.
Analysts at Investec forecast pre-tax profits of £50.5m and EPS of 35.2p for the year to December 2018, up from £47.3m and 32.2p in 2017.
| FDM (FDM) | ||||
| ORD PRICE: | 950p | MARKET VALUE: | £ 1.02bn | |
| TOUCH: | 948-950p | 12-MONTH HIGH: | 1,039p | LOW: 685p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 59.9p* | NET CASH: | £36.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 106 | 19.9 | 14.1 | na |
| 2014† | 123 | 19.0 | 12.7 | 7.5 |
| 2015** | 161 | 29.4 | 20.5 | 16.5 |
| 2016 | 189 | 35.3 | 24.4 | 19.6 |
| 2017 | 234 | 43.7 | 29.8 | 26.0 |
| % change | +24 | +24 | +22 | +33 |
| Ex-div: | 24 May | |||
| Payment: | 15 Jun | |||
| *Includes intangible assets of £19.5m, or 18p a share**DPS excludes special dividend of 5p †FDM relisted in June 2014 | ||||
