E-learning software supplier ILX is reaping the benefits of concentrating on international expansion of its best practice e-learning software and the closure of poorly performing operations.
It has even enabled ILX, which has shifted sectors from support services to software, to reinstate the dividend. A 1.5p a share dividend is payable on 14 October. The dividend was withdrawn last year because ILX wanted to spend the cash on its international business and reduce its net debt, which was down from £3.16m to £1.89m at the end of March 2011.
The UK best practice division, predominantly PRINCE2 training, was flat last year although sales of higher margin products meant that the profit contribution was slightly higher. Most of the overall improvement came in the international best practice division with Australasia and the Middle East generating strong growth.
The closure of investment banker training business CTG led to massive write-offs and the total cost in the year to March 2011 was £10.5m. Excluding that, pre-tax profit jumped from £757,000 to £1.42m, on revenues up from £11.9m to £12.9m. The executive directors taking a pay cut also helped to improve profit.
At 29.5p a share, up 2p on the day, ILX is valued at £7.96m.
International expansion will continue to be key to growth and ILX wants to further exploit its own brand through improved marketing. Developing a consultancy business will also help to enhance growth. House broker FinnCap forecasts a 2011-12 profit of £1.8m, rising to £2.1m the following year. The shares are trading on less than seven times 2011-12 prospective earnings.
Download the June 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFJune2011_21.pdf
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