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Clarity Commerce Solutions

  • BY: Andrew Hore |
  • POSTED: 25/07/2008 |

Clarity Commerce Solutions returned to profit in the second half of last year but still made small loss for the year as a whole.

The reported loss did fall from £518,000 to £74,000 in the year to March 2008, as revenues on continuing activities were flat at £15.4m. Recurring revenues are about one-third of the total. There were exceptional charges of £252,000 relating to the restructuring of the business and the departure of former chief executive Graham York. Without these Clarity would have reported a profit.

The new management team has made a good start and Clarity will regain the confidence of investors if the business continues to improve. Management says that it can see opportunities to improve the business.

New house broker Arbuthnot forecasts a profit of £1m this year. At 23.5p a share, which equates to eight times prospective earnings. Clarity is valued at £7.53m.

After the year end two non-core businesses were sold. Since the disposals the net debt has been cut to £1.5m. This should be wiped out by cash flow from operations in less than two years.

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