Nearly half of NetDimensions’ share price is covered by its cash pile although the talent management and learning software provider has announced its first ever dividend which will return some of the cash to shareholders.
Net cash was $6.86m at the end of 2011 – equal to 17.8p a share. NetDimensions is paying a maiden dividend of 3.1 cents (2p) a share, although 0.8 cents of this is the underlying dividend and the rest is a special dividend designed to return some of the surplus cash to shareholders. The shares do not go ex-dividend until June.
At 38p a share, NetDimensions is valued at £9.47m.
NetDimensions had a strong year in 2011, although some of the growth in revenues came from a full 12 month contribution from acquisitions made in 2010. The fourth quarter was particularly strong and accounted for 46% of the year’s revenues. New client wins also helped with software licences contributing around two-fifths of revenues, while software customisation and implementation showed the fastest growth. Revenues increased from $8.26m to $12.3m in 2011, while reported profit jumped from $116,000 to $635,000. Excluding non-cash items, profit nearly trebled to $1m.
NetDimensions has nearly $4.5m of deferred revenue in the balance sheet that should be recognised this year. Recurring revenues are running at $7m a year.
NetDimensions has recruited new staff and opened an office in Shanghai. The strategy is to be seen as a talent management software business rather than a learning software business, which is a much narrower market segment of talent management worth around one-third of the total. The software should fully cover talent management by the end of 2012 and NetDimensions expects to reap the benefits in 2013. Revenue growth will be much slower in 2012.
NetDimensions is looking to acquire more of its own resellers as well as expanding its geographic coverage.
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