Article14 Apr 2011 11:23
Substantial progress in bedding down its acquisitions
over the past nine months should help Parseq
(PSQ:AIM) drive further growth from its business outsourcing
services and mobile banking technology. Risktolerant
small cap punters might like to buy in light of this
year’s share price weakness.
A disappointing trading update at the start of the year (20
Jan) hammered the shares and last week’s full-year results (7
Apr) illustrated the full impact of accounting charges relating
to the acquisitions of Intelligent Environments and Avance.
Group pre-tax profit came in at £720,000 but once these one-off
items were stripped out, normalised profit from operations was
a healthy £3.7 million on revenues of £16.4 million.
Surrey-headquartered Parseq continues to invest in its sales
and marketing operations, which are key if it is to increase revenues
and eventually drive up operating margins. On the
services side, which includes the old Documetric businesses,
management has put in place a new managing director and
recruited four sales people since December.
Chief executive officer Rami Cassis also intends to strengthen
the sales and marketing of its software business, the previously
Aim-listed Intelligent Environments, to promote sales of
its innovative online and mobile banking services. ‘It’s taken a
bit longer than I would have liked, but it has only been eight
months since the acquisition,’ he tells Shares. ‘Selling direct
will increase visibility of the sales pipeline, while enabling us
to exert more control over the client relationship and
improve margins.’
New deals with two big credit card processors, in addition to
First Data, will also provide additional channels to market for
its mobile services.
Bob Liao, analyst with house broker Canaccord Genuity,
expects full-year revenues for the year ending 31 December
2011 of £26.3 million and pre-tax profits of £4.3 million. He has
a target price of 13p, implying upside of 132%.
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