16th Jun 2014 09:20
LONDON (Alliance News) - Allocate Software PLC said Monday that it will post earnings before interest, tax, depreciation and amortisation and cash ahead of market expectations, and revenue in line with expectations, for the year to end-May.
The software and services company will announce its full-year results on July 21.
Allocate said that Healthcare, its main division, had continued to perform strongly, securing new contracts during the year. In this division, the company's bookings exceeded revenue, boosted by the deployment of its Allocate Cloud service last June.
The level of customers adopting the service exceeded its expectations, Allocate said, with new customers in 2014 being "significantly" ahead of 2013.
The company also secured a number of new customers for its HealthRoster software during the year, and saw renewal levels ahead of the previous year. Some 33% of its HealthRoster customer base is now live on the latest version of the software platform HealthRoster V10, it said.
Its new software suite SafeCare All-the-Time, designed to improve transparency on staffing levels for the National Health Service, has been well received. Allocate expects the suite to be an important growth driver over the next few years.
However, sales of its Patient Flow and Emergency Department products have been slower than planned, it said, as decision-making cycles were longer than it had expected.
In its Defence and Maritime division, no new customers were secured during the year. However Allocate said that it maintains its strong position in the sector as it retained long-term key customers. The two divisions made up 14% of total revenue during the year.
"Allocate closes the financial year 2014 with high levels of customer engagement, and we remain confident that we are well positioned to continue to meet their needs and deliver on the strategy that we have laid out," said Chief Executive Ian Bowles in a statement.
Numis retained its Buy rating for the company, saying that Allocate's trading update indicated EBITDA and cash towards the top-end of its forecasts of GBP6.5 million and GBP12.9 million respectively.
Numis analyst David Toms said that Cloud services were a strong driver for the company, securing new customers and aiding future visibility.
"As with last year, Cloud is the star of the show," Toms said. "We estimate Cloud annual recurring revenue of circa GBP2 million now, from a standing start under two years ago."
Shares in Allocate were trading up 5.6% at 117.78 pence Monday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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