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IS Solutions

  • BY: Andrew Hore |
  • POSTED: 11/09/2012 |

Online technology services provider IS Solutions reported higher interim profit but warned that customers are taking longer to make purchase decisions.

IS Solutions says that a higher proportion of recurring revenues means that the business is partly shielded from this uncertainty. The second half is still likely to be tough.

Revenues grew from £4.05m to £4.52m in the six months to June 2012, while pre-tax profit edged ahead from £310,000 to £337,000. Net debt was £984,000 at the end of June 2012, while there is an investment valued at £538,000 that can be turned into cash. There is also a £700,000 investment in web-based analytics software developer Speed Trap. The second half is normally the period when cash is generated and net debt should fall to £300,000 by the end of 2012. 

Growth in the managed services operations was held back by lower maintenance renewals from government departments. Project work revenues are growing but the use of contractors knocked one percentage point off gross margin.

The interim dividend is 10% higher at 0.44p a share.

At 51p a share, down 5.5p, IS Solutions is valued at £12.7m. House broker finnCap forecasts an improvement in full year profit from £830,000 to £900,000. The shares are trading on 16 times 2012 prospective earnings.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFAugust2012_35.pdf

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