Advanced Computer Software : Profit up 63% with 100% cash conversion - Half Year Results

Published on: Tuesday 4th November, 2014

Advanced Computer Software Group plc (AIM: "ASW", "Advanced", or "the Group"), a leading provider of healthcare and business management software and IT services, announces its unaudited half year results for the six months ended 31 August 2014. 

Financial highlights

• Group revenue up 9% to £108.1m (H1 FY14: £99.1m)

• Adjusted EBITDA* up 14% to £25.3m (H1 FY14: £22.2m)
• Pre-tax profit up 63% to £7.8m (H1 FY14: £4.8m)
• EPS growth of 44% to 1.3p (H1 FY14: 0.9p) - adjusted EPS** rose 6% to 3.6p per share
• Cash generated from operating activities £23.7m  - cash conversion 100%^
• Net debt of £37.9m, down from £49.4m at February 2014
• Contracted future revenue remains strong at £209.0m
• SaaS/Subscription revenue of £21.2m, 31% of recurring revenue
• Business optimisation action expected to deliver significant gains

*Adjusted for one-off acquisition and restructuring costs and share-based payments
** Adjusted for amortisation of acquired intangible assets, exceptional costs and share-based payments
^ Adjusted EBITDA less depreciation and exceptional costs

Divisional highlights

Health & Care

• Revenue up 10% to £17.1m (H1 FY14: £15.6m), 6% organic growth^^
• EBITDA up 4% to £5.3m (H1 FY14: £5.1m)
• Significant investment in the rapidly evolving community care and mental health market - now 13 NHS trusts with preferred or contracted status
• Strengthened position as number one provider to out of hours sector including NHS 111 and home and residential care markets with growing number of mobile solutions

Business Solutions

• Revenue up 8% to £72.5m (H1 FY14: £67.1m)
• EBITDA up 13% to £19.1m (H1 FY14: £16.9m)
• Implementation of largest ever contract successfully completed
• Successful integration of CSH - now returning to growth
• Underlying organic growth^^^ of 2%

365 Managed Services

• Revenue up 11%, all organic^^, to £18.5m (H1 FY14: £16.7m)
• EBITDA up 9% to £2.4m (H1 FY14: £2.2 m) 
• Continued demand for cross selling cloud services
• Return of historically strong growth profile

^^ Organic growth is calculated on a like-for-like basis
^^^Underlying Organic growth is calculated as organic growth adjusted for the impact of completing a major contract in the prior period

Vin Murria, CEO, commented:  

"We have delivered further strong performance as we start to benefit from last year's acquisition of CSH, as well as continuing to grow organically across the Group - particularly in our healthcare and cloud markets.  In addition, Software as a Service (SaaS)/Subscription revenue now account for 31% of our recurring revenue.

"Our focus is now on optimising operating margins across the Group, which is expected to deliver significant gains.  This, together with our strong balance sheet and excellent track record, positions us well for long term sustainable growth, and to take advantage of acquisition opportunities opening up in all of our markets.

"We are increasingly confident of delivering full year results in line with our expectations, based on our solid forward visibility and contracted revenues."

Enquiries

Advanced Computer Software Group plc
Vin Murria, Chief Executive Officer	[phone]
Guy Millward, Chief Financial Officer
Instinctif Partners	[phone]
Adrian Duffield/Kay Larsen
N+1 Singer (Nomad and joint broker) Shaun Dobson /Gillian Martin	[phone]
Arden Partners plc (Joint broker)	[phone]
Steve Douglas