LONDON (Alliance News) - Microgen PLC Monday maintained its interim dividend, as it saw profit decline in the half year to end-June on lower revenue, damped by exceptional costs.
The IT services and software company proposed an interim dividend of 1.1 pence per share, unchanged from the previous year.
It posted a pretax profit of GBP3.05 million, down from GBP4.51 million, hit by a slight decline in revenue to GBP14.7 million from GBP14.9 million, high operating costs, and GBP427,000 in exceptional costs relating to options approved by shareholders.
The company said that following its strategic review in October 2013, it has switched its operating structure so that it is now a corporate parent of technology businesses, which are operated as independent business units.
As a result of the review it has "significantly" increased investment in its Aptitude software business to pursue opportunities in the growing 'Big Data' trend. This investment led to operating margins dropping to 11% from 20% in this segment.
Microgen launched the latest version of the Aptitude software in April. The company said that "tangible" results from its investment will take time to realise.
In financial systems, margins dropped to 50% from 54% in the previous year as its application management business declined, and it transferred corporate costs into the business under its new strategy.
Revenue from its payment software products remained stable, and its wealth management product for trust and fund administration 5Series was well received, it said. However, its application management business continued to decline as Microgen had expected.
The company said that whilst a majority of its revenues are invoiced in pounds sterling, it also has exposure to the US dollar and South African rand, leading to a hit of GBP100,000 on its profit from the strengthening of sterling during the period.
Shares in Microgen were trading down 1.1% at 123.60 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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