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Today 25 February 2014



NETCALL the company focused on end-to-end customer engagement software delivered its interim results this morning.

I have covered these a few times in the past and spoken with management on various occasions, so always of interest to me.


So, for the six months to 31 December 2013, the company reported-


  • A modest increase in revenue to £8.43m against £8.16m
  • Adjusted EBITDA was up by 13% to £2.48m - £2.19m 2013
  • Pre-tax profit increased 3% to £1.37m against the £1.34m last year.
  • Basic EPS came out at 1.04p compared to the 0.92p.
  • The balance sheet is debt free with net cash of £10m


It appears from the boards comments that the first half of the year has progressed well and trading is comfortably in line with management expectations, which one would hope is aligned to the Broker forecasts.


The company added, that there had been strong growth in new orders with increased visibility and improving margins.

Also, positive momentum is continuing into the second half and the board remains confident in a successful outcome for the year.


Looking at the share price of 54.5p and the current market cap of £67m I can’t help but feel, that Netcall is perhaps up with events.


That isn’t to detract from the excellent progress that has been made over the last couple of years and it is worth noting that with business spanning the likes of the NHS, Private Medical Providers along with Blue Chip clients, it enjoys decent recurring revenue.

 In the last set of Preliminary results, that level of recurring revenue came out at an impressive 66% and with the company re-investing into new improved platforms it should continue to retain and win business.


In the last Broker note, FinnCap was forecasting adjusted EBITDA of £4.5m and adjusted pre tax profits of £4.2m, so it should be interesting to see if, or how that has changed, when I get to take a look.


All in all, Netcall has bedded in acquisitions, demonstrated the ability to generate cash and embarked upon a progressive dividend policy.

Currently though, the shares trade on a forward PER of 21 and even allowing for the strong cash position, the price for now looks pretty full to me.


One to keep an eye on though and I will no doubt add some thoughts if there is any material change in one of the notes released today.


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