Software company smartFOCUS continues to provide positive surprises for investors.
The marketing and consumer relationship software provider reported a swing from a loss of £649,000 to a profit of £154,000 at the interim stage. Revenues improved from £4.96m to £5.63m in the six months to June 2009 even though smartFOCUS is still working through the switch from perpetual licences to a Software-as-a-Service model. Recurring revenues account for 61% of group revenues. Many newer customers are taking email services and these may upgrade to higher margin software in the future.
This has been enough for house broker Arbuthnot to upgrade its profit forecast yet again this year. The broker increased the 2009 forecast by £100,000 to £400,000. The company has already secured 87% of the revenues it requires to make that forecast. The 2010 profit forecast is £640,000. Two-thirds of 2009 revenues should recur in 2010.
The shares are trading on 17 times forecast earnings for 2010.
At 12p a share, smartFOCUS is valued at £11.3m.
There was £1.54m in cash in the bank at the end of June 2009.
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