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Intelligent Environments
- BY: Andrew Hore |
- POSTED: 27/09/2009 |
Intelligent Environments increased its interim profits by one-third to £458,000.
The online savings and investments applications software provider increased recurring revenues by 21% and this means that 30% of total revenues of £3.2m in the six months to June 2009 were recurring. Transactional revenues were lower than in the second half of 2008. IE receives a payment every time there is an application for savings and investments. A reduction in applications hit transactional revenues but this should be a short-term blip.
The profit was struck after capitalising development costs of £356,000 - net of amortisation. The amortisation charge and the capitalised costs should move towards cancelling each other out by 2011.
Banks are keen to attract more funds from investors and they also want to reduce their costs. These are both arguments for installing IE’s software. IE is extending its coverage to mortgages and insurance.
The contract with National Savings and Investments has been completed in the second half. The premium bonds module went live in September 2009.
House broker FinnCap forecasts an increase in full year profits from £1.3m to £1.7m in 2009. That puts the shares on just over ten times forecast 2009 earnings. IE will need to win a couple of new contracts by the end of November to achieve that target. A maiden dividend of 0.1p a share is forecast.
IE has net cash of £1.05m and this is expected to rise steadily. Cash flow tends to be strongest in the second half. There are still more than £7m of tax losses available.
At 11.75p a share, IE is valued at £19.6m.
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