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IS Solutions

  • BY: Andrew Hore |
  • POSTED: 20/09/2010 |

Online technology services provider IS Solutions is reaping the benefits of growing its managed services revenues.

Overall revenues jumped from £5.12m to £6.41m in the six months to June 2010 because of a sharp rise in third party licence sales. Recurring income also rose from £1.6m to £2.36m and this generates the majority of gross profit for the company.

Admin costs were cut back and this helped underlying profit to improve from £213,000 to £253,000. Last year’s purchase of the company’s office in Sunbury-on-Thames was part of the reason for the lower costs and there was only a small negative effect from the interest charge. 

The interim dividend is 9% higher at 0.36p a share. Net debt was £932,000 at the end of June 2010. There is also a £500,000 trading investment in the balance sheet.

IS is being given the first right of refusal on the implementation services for all of SAP’s CXA (Customer Experience Analytics) product sales in the Americas. It also has first rights to provide managed services in the rest of the world. This deal was signed in August so it made no contribution in the first half. The real benefits will come through in 2011.

IS remains positive despite the general economic uncertainty.

FinnCap forecasts a rise in full year profit from £654,000 to £790,000.

At 39.5p a share, IS Solutions is valued at £9.75m. The shares are trading on 15 times prospective 2010 earnings.

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