Shares digital

Ascribe (ASP:AIM) – Interims PTP: £0.81m (£1.66m) Divi: n/a (n/a)

Sales slipped 6% and pre-tax profits halved at the healthcare IT solutions group, after last autumn’s technical issues and delays in customer orders. But glitches with a new internet-based platform have now been ironed out and a bulging order backlog means management is confident the £28 million cap can still deliver 20% sales growth for the full year.

‘We have recurring revenue of £5.7 million to come in the second half, which takes us to £12.8 million,’ explains chief financial officer Jeremy Lee. ‘We have an order book of £3.1 million and expect to deliver 80% of that, so that’s £15.3 million, then we are expecting strong order intake in the second half, which we will partly deliver. We have had £1 million in orders already,’ he asserts.

Traditional purchasing patterns at the NHS, where the financial year ends in early April, have always given Ascribe a second-half bias to its business. A government move to unblock localised NHS procurement decisions, after a hiatus arising from ongoing confusion caused by the Connecting for Health programme, should give this a further boost. April’s publication of an alternative suppliers’ catalogue (ASCC) will also be a fillip, should Ascribe be included.

Last autumn’s purchase of Scorpio, an eighth acquisition since Ascribe floated at 18p in December 2004, has bedded down well. Cross-selling has already yielded £1 million in new business and further deals are likely.

‘We have done all of our acquisitions without raising fresh cash and we can see a way to continue this,’ says Lee. ‘We have borrowed less than one times EBIT (earnings before interest and tax) and we can go up to three, so we have sufficient room for small deals.’

The shares of the Bolton firm slipped 0.5p to 24p.

Shares says: Very cheap, if topline forecasts are met, on a prospective PE of barely eight.

by: Russ Mould