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IS Solutions

  • BY: Andrew Hore |
  • POSTED: 19/03/2014 |

IS Solutions had a stronger second half performance in 2013 enabling it to produce the eighth consecutive year of higher profit. 

In 2013, revenues improved from 9.21m to 9.77m, while underlying profit moved ahead from 895,000 to 969,000. Net debt fell by nearly two-thirds to 164,000 at the end of 2013. The final dividend rises from 1p a share to 1.12p a share, taking the total for the year 1.6p a share.

The main negative in the financials was the weakness of the US dollar, which led to an increase in the exchange loss from 20,000 to 108,000. The company may increase its day rates to offset the reduction in sterling income.

Analytics business continues to grow strongly, while recurring revenues from managed services recovered in the second half after the loss of business with a major customer was made up for by new customers. The recurring revenues generated 64% of group gross profit, down from 68.8% the previous year. Third party software sales fell in the second half but were still higher year-on-year.

Analytics software business Speed-Trap, in which IS Solutions has invested 800,000, is performing strongly and this is also helping IS Solutions to win new business.

House broker finnCap forecasts a 2014 profit of 1.1m.

At 69p a share, IS Solutions is valued at 17.5m. The shares are trading on 19 times prospective 2014 earnings.

Download the latest AIM Journal from http://wwww.hubinvest.com/AIMPDFMarch2014_54.pdf

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