adfn news23 Sep 2010 19:56
The turnaround is continuing at the oddly named GoIndustry Dovebid , the provider of asset management, auction and valuation services, but the market has yet to recognise the value of this strongly cash generative company, the house broker believes.
“Interim results underline the progress that has been made in turning what was a loss making concern into a profitable and more focused business,” said WH Ireland, which has just initiated coverage of the stock.
“We believe the market opportunity to be significant with a revised company strategy leveraging GoIndustry’s global strengths into the targeting of higher margin, corporate-led, business. Although the turnaround programme has yet to complete, and thus execution risk remains, we believe the company has the capability to generate significant levels of earnings and cash,” said WH Ireland analyst Matthew Davis.
The broker rates the shares a “buy” and has a price target of 195p, based on a discounted cash flow valuation model.
WH Ireland thinks the company is set to make a maiden full year profit of around £0.44m after interim results that saw adjusted pre-tax profits of £0.2m.