Servoca disappoints with half year results

Servoca failed to impress investors with its half-year results on Wednesday, despite posting a doubling of profit.Concerns are likely related to the reduction in both revenue and profit seen in its Security business, which is due to the continued gross margin pressures experienced by the Manned Guarding sector. Revenue climbed from £21.47m to £22.39m year-on-year (YOY), while pre-tax profit rose from £0.22m to £0.41m. Before share based payment and amortisation charges, basic earnings per share doubled to 0.28p YOY. Administrative expenses (before amortisation and share based payments) for the current period were £5.84m, up 5.4% from £5.54m a year earlier. Net debt at March 31st 2014 was £2.91m, compared to £2.92m in 2013.Chief Executive Andy Church, said: "We are pleased with a strong start to the year with a clear focus on profitability. The transformation in the performance of the group established in the prior year has continued in the first half of this year and momentum remains positive. "Our Education and Nursing recruitment operations are performing well and carry good momentum into the second half of the year. Full year profitability is expected to significantly benefit from the pivotal September period for our Education businesses. "There has been a positive change to market conditions over the last year and our business has a strong platform for future growth."House broker Finncap described the results as "encouraging", saying they reflected a strong start to the year. The share price had dropped 16.42% to 14p by 09:02.NR