Netcall Share Chat (NET)

Article from growthcompanyinvestor.co.uk today.

Customer engagement specialist Netcall saw pre-tax profits rise by 46% to £1.3m on sales of £8.2m for the six months to December. Net csh stood at £8.2m while earnings per share powered ahead from 0.95p to 1.32p.

The company's revenues are primarily recurring, coming from long-term contracts with customers. Margins also improved from 87% to 90%, while Netcall enthused that it won a number of contrct wins over the period including warranty provider Domestic & General and private hospital network Spire Healthcare. There were also a number of acquisitions, with enterprise content management specialist Serengeti snapped up for £2.9m last September.

The group noted that its cloud based software - currently used by clients such as Louis Vuitton and Autoglass - was now being extended to apps on iPhones and Android phones. Furthermore its product development work continued, with its "Liberty" software - used by businesses for managing contacts and data - recently upgraded, something it notes will generate additional revenues for the group.

Consensus forecasts are for pre-tax profits of £3.85m on sales of £16.75m for the year to June 2013. A dividend of 0.6p is also pencilled in.

Recommended by Growth Company Investor last October at 28.3p, shares in Netcall have already gained over 30%. With a string of contract wins under its belt Netcall has shown itself to be a strong performer. Operating in one of the more niche areas of the technology sector, its boring range of software continues to hold considerable prospects for further growth, with a recurring revenue stream that should shield it from any disappointments. We retain our buy rating.

Interesting. We need to do our own research of course, but it is always good to read articles like the above. I have found articles from GCI very useful as a starting point to any investment thoughts I may have; a number of them proving (very) profitable; but don't go on their recommendation(s) alone. Personally, I may look at how I can invest a little more. Good luck all.

Regards

CM

Netcall are a very interesting proposition with the cash at their disposal several bolt on aquisitions would add considerably to the offering, as Serrengetti will do in this financial year,with the track record of the management intergrating aquisitions the next few months should see further traction

Netcall: Merchant Securities shifts target price from 38p to 43p, while staying with its buy recommendation.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) - a frequently used measure of a company's operating performance- increased by 34% to £2.19m. Adjusted earnings per share rose 39% to 1.32p.

Basic earnings per share jumped 44% to 0.92p.

Henrik Bang, Chief Executive Officer of Netcall, commented: "Trading was comfortably in line with expectations during the first six months of the financial year. Netcall enjoys a growing pipeline, a high proportion of recurring revenues and an expanding product portfolio as a result of introducing new solutions and the acquisition of Serengeti.

"In addition our financial strength provides us with the ability to continue investing in growth. Therefore, whilst the board is mindful of the prevailing economic climate it remains confident in achieving a successful outcome for the year."

Pre-tax profit rose 46.0 per cent to 1.34m pounds at AIM-listed customer engagement software provider Netcall for the six months ending December 31st.

In its unaudited interim results, the group further reported that group revenue for the year had increased 12% to £8.16m, comprising 6% organic growth and an initial three month contribution from Serengeti Systems.

Recurring revenue represented 65% of total revenue, marginally less than the 68% recorded in the preceding half of the year.

Meanwhile, the gross profit margin improved from 87% to 90%, which the group said reflected the benefit of continuing cost saving programmes.

Wouldn't worry mate. Good Interims here and so far an MM opening price on the decent news but we may see
a slight drop over the weeks creating a buying slot, it seems to be case often recently. Netcall's certainly setting a footing. GL.

Financial Highlights

· Revenue increased 12% to £8.16m (H1 FY12: £7.31m)

· Adjusted EBITDA(1) increased by 34% to £2.19m (H1 FY12: £1.63m)

· Adjusted earnings per share(2) increased 39% to 1.32p (H1 FY12: 0.95p)

· Revenue of a recurring nature(3) of £5.3m corresponding to 65% of total revenue

· Cash generated from operations increased 32% to £2.42m (H1 FY12: £1.83m) before acquisition and reorganisation payments

· Profit before tax increased 46% to £1.34m (H1 FY12: £0.92m)

· Basic earnings per share increased 44% to 0.92p (H1 FY12: 0.64p)

· Debt-free balance sheet with net cash funds of £8.18m

Results out tomorrow - didnt get a chance to buy back in. GL.

Thats a nice holding...