Advanced Computer Software delivers 'fantastic' year

Advanced Computer Software Group, which provides healthcare and business management software, has hailed a 'fantastic' half year during what it described as a tough operating environment, with revenues and cash soaring.

The group delivered group revenue of £56.8m, up 20% on the £47.3m seen in the same period the previous year, boosting pre-tax profit from £3.1m to £4.5m year-on-year. Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) rose 10% from £12.0m to £13.2m over the same period.

The company has also turned debt of £25.3m into cash of £1.5m, and was keen to emphasise that this is due to its position as a substantial cash generative business. Cash generated from operating activities during the period totalled £12.3m, while £4.7m was spent on acquisitions.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Looking ahead, the company is becoming increasingly confident about the results for the full year, and said it will continue to maintain its focus on organic growth and cash generation in the second half in addition to completing the integration of acquisitions made earlier in the year.

In an interview with Sharecast and Digital Look, Chief Executive Officer Vin Murria said: "Four years ago we didn't even exist. Since then we have developed a business which delivers annual revenue of more than £100m, with have 1,000 members of staff, and we have a cash generative business. As an indication of our ambition, if we were asked 'Do we think we can do the same again?' The answer would be 'absolutely'.

"In terms of the market, we expect to see a lot more acquisitions come up over the next 12 months - although any acquisitions we make will be very sensible ones that of course fit our profile well".

Divisionally, the Health & Care business saw a 19% increase in revenue to £13.0m (H1 2011: £10.9m), with adjusted EBITDA up 18% to £4.0m (H1 2011: £3.4m). The division is now the preferred supplier for over 80% of the market for the NHS 111 scheme, while the rest remains unallocated.

In Business Solutions, revenue rose 5% to £27.6m (H1 2011: £26.2m) while EBITDA was up 7% to £7.4m (H1 2011: £6.9m).

365 Managed Services delivered a 59% increase in revenue to £16.2m (H1 2011: £10.2m), while EBITDA climbed 14% to £2.7m (H1 2011: £2.2m).

In a statement Murria added: "From this strong operational and financial base, we are confident that we can maintain our momentum throughout the second half and the board anticipates recommending a maiden dividend at the year end."

The share price rose 4.30% to 66.75p by 16:25.

NR