IT services Maxima Holdings reported lower interim revenues and profits because of the loss of the QAD business but the new management team says that it is making progress with its planned strategy.
Maxima has reduced its cost base to reflect the loss of the QAD enterprise software distribution contract but the benefits are only starting to show through.
Maximaís revenues fell from £28.3m to £26.2m in the six months to November 2009. Recurring revenues account for three-fifths of the total. Pre-exceptional profit declined from £3.7m to £2.6m. Restructuring costs of £1.3m are not included in the figure. There should be no more exceptionals in the second half.
Cash flow is strong and net debt has declined by around £4m over the past 12 months and was £13.5m at the end of November 2009. The dividend has been halved from 2p a share to 1p a share. A total of 3p a share is expected for 2009-10.
Maxima either owns its intellectual property or supplies major software such as Microsoft Dynamics AX. Many clients are migrating older software to up to date software.
Management is increasing its revenues from existing customers and becoming an increasingly important partner for the likes of Microsoft and IBM. Two customers have signed managed services contracts worth £6.5m in total. These are all indications that the managementís strategy is bearing fruit.
At 90.5p a share, Maxima is valued at £22.9m.
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