Professional services provider FDM (FDM) has been focusing on its higher-margin Mountie (consultant) business, which now accounts for 97.6 per cent of the top line, or £239m, a 15 per cent increase over 2017. In turn, the overall gross margin edged up four percentage points to 49 per cent. Contractor revenues, on the other hand, are now deemed "ancillary" and subject to a "managed decline".
The UK and Ireland contributed the lion’s share of adjusted operating profits – at £36.7m, representing 17 per cent growth. In North America, adjusted operating profits dipped by 11 per cent to £13.6m – reflecting ongoing investment in training. Still, Mountie revenues here climbed by a tenth. Meanwhile, FDM signed a 10-year lease for its new Sydney Academy, the company’s first permanent centre in Australia.
Cash conversion, though healthy at 93 per cent, was slightly down on the previous year, partly due to changes to working capital and the mix of receivables. Chief executive Rod Flavell noted that FDM has acquired two substantial client relationships in America, which have much longer payment cycles than is typical of its UK clients.
House broker Investec expects adjusted pre-tax profits of £54.1m and EPS of 37.8p for 2019, against £51.4m and 35.9p in 2018.
| FDM (FDM) | ||||
| ORD PRICE: | 855p | MARKET VALUE: | £ 926m | |
| TOUCH: | 852-858p | 12-MONTH HIGH: | 1,138p | LOW: 721p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 65p* | NET CASH: | £33.9 | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2018 | 245 | 48.3 | 34.3 | 30.0 |
| % change | +5 | +11 | +15 | +15 |
| Ex-div: | 23 May | |||
| Payment: | 14 Jun | |||
| *Includes intangible assets of £19.4m or 18p a share | ||||
