Shares digital

Netcall (NET:AIM) – Interims PTP: £0.13m (£0.38m) Divi: n/a (n/a)

The global credit crunch claimed another victim when the telecommunication services firm's run of six consecutive halves of profit improvement came to an end. Although a deferred tax credit worth over £500,000 propped up net income, lower licensing sales to financial services customers in particular prompted stated pre-tax profit to drop by almost two-thirds.

'The first half was difficult and not what we expected when we started the period,' admits chief executive officer Henrik Bang. 'Nor was it what our customers expected. They were hit by external factors and they shared some of that with us. There was a big reluctance to make capital investments, so this hit our licensing business,' he explains.

Even though recurring revenues from service, maintenance and contracted hosted services generate over half of the £10.3 million cap's sales, Netcall still needs to pull in licensing deals in the second half if it is to meet broker forecasts for the full year

'Over the past nine to 12 months, we have upgraded our sales force capability, and our pipeline today is wider and more robust than it has ever been,' confirms chairman Ron Elder. 'In light of the current trading conditions and lower conversion rates, it is imperative we keep going down that route, so we will continue to add sales resource'.

Netcall's flagship QueueBuster product enables callers to place a call, hang up and keep their place in a call centre queue. The company either sells a licence and installs its technology onsite or provides hosted services, run remotely from its London-based platform.

The shares fell 7% intra-day to 16.25p, a new 12-month low.

Shares says: A £2.7 million cash pile equates to a quarter of the market cap and will provide support.

by: Russ Mould