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I recommended shares in AIM-listed governance, risk and compliance software provider Access Intelligence (LSE:ACC) on t1ps, the website I founded in 2000 and edited until September of this year when I left to set up the Nifty Fifty offering, in November 2010 at 4.25p. They have traded briefly above 5p since but fell to lows of 2.25p a year ago, before subsequently recovering somewhat to trade at a current 3.5p. Following the close of the company’s year to 30th November 2012, the following reviews a trading update the company has released today and what it means for the current investment case…
Click here to read my previous update on Access Intelligence
The company has today announced that “sales and profit before tax will be broadly in line with market expectations and that cash balances at the year end exceeded £2.7 million”. The cash position compares to £3.2 million at the interim stage – with the company having stated in last year’s results announcement that “in 2012 we will continue to invest heavily for future shareholder value, depressing profits in the short term in order to benefit from significant revenue growth in 2013 and beyond” and in this year’s interim results that “operating costs rose to £2.502 million (H1 2011: £2.085 million), reflecting the significant investment made” as well as those results showing £0.284 million of capitalised software development costs (H1 2011: £0.012 million).
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The interims also showed an underlying pre-tax profit of £33,000 (after a £25,000 non-cash charge for share options and £0.224 million of exceptional re-organisation and centralisation costs, there was a reported loss of £0.216 million). However, the investment burden of last year and the company now being in a new year means it is the current year prospects that the market will now be looking to. At the last reported results the investment programme and a slower than anticipated turnaround in the AI Talent (training management) subsidiary saw forecasts cut to a £0.5 million profit for its year the company has just commenced.
A current £8.1 million market cap means robust continuing growth remains needed from here to justify a higher valuation but, from a base of 68% of revenues being recurring, a significant investment programme well underway and operating in areas which look to have good growth potential, I continue to consider this certainly realistic. This also looks to be the view of Chief Operating Officer Joanna Arnold who earlier this month subscribed for £165,000 of new shares in the company at 4p each and subsequently acquired a further £35,000 of shares at the same price. This gives me the confidence to suggest a small, speculative nibble may be justified here ahead of a more detailed update on present trading anticipated in the full year results statement which is expected to be released in the second week of March.
Yes, Knoxville is heating up. AD taking more heat than Mitch Barnhart. Now talking Butch Davis and Bobby Petrino out of desperation. Anger at AD allowing Strong and Gundy to play them for fat contracts at current schools.