Cash generation strong at Tikit

published 10 July 2012

Things appear to be mostly tickety-boo at Tikit, the provider of software solutions to the legal and accountancy professions, though sales in North America have not grown as fast as hoped.

Once all the numbers have been totted up, total revenues in the first half of 2012 are likely to be similar to revenues in the corresponding period of 2011 but, importantly, will comprise a larger proportion of products developed in-house, which offer the company a higher margin.

Tikit-owned software sales of Template Management System and Partner for Windows PMS solutions, have been particularly successful, the group said, as have those of Autonomy's iManage document management solution. "These sales provide Tikit with a healthy order book of services based revenue for the second half," the pre-close period trading update revealed.

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Things have not been all-rosy in North America, where the company has been making a big marketing push for its Tikit-owned software. Sales in the first half of the year were slower than expected, but the group is expecting stronger sales in the second half in the USA on the basis of a "good pipeline of opportunities".

Cash generation by the group in the first half was described as "excellent" and the net cash at June 30th was significantly higher than a year earlier, even after taking into account higher dividends paid to shareholders and the purchase of shares for the employee benefit trust.

As per usual, profit generation is expected to be second-half weighted.

The shares rose 3p to 321p in the first hour of trading after the update.