17th Mar 2015 10:53
LONDON (Alliance News) - Regenersis PLC Tuesday reported strong growth in a key profit figure in the first half of it financial year, and said it expects operating profit margins to steadily improve over the medium term after it exited the low-margin UK mobile repair business last year and focused on growing its data erasing and set-top box diagnostics business.
The provider of electronics diagnostics and repair services as well as data erasing and smartphone repair and insurance, reported a pretax profit of GBP3.5 million for the six months to end-December, up from GBP1.6 million a year earlier, mainly because it now expects to pay less as a contingent consideration for Blancco, partially offset by higher acquisition costs and amortisation of acquired intangibles.
Excluding those items, as well as restructuring costs and share-based payments, its closely-watched headline operating profit rose to GBP6.0 million, from GBP4.6 million, as revenue rose to GBP101.9 million from GBP99.7 million and its operating profit margin rose to 5.9% from 4.6%.
"Depot Solutions has delivered organic growth following our decision to exit our lower margin mobile operations in the UK, and it is a significant milestone that Software and Advanced Solutions is now the largest, as well as the fastest-growing part of the group in profit terms, with very exciting market opportunities in prospect. As a result the group profit margin is tracking upwards, and we expect to be able to deliver steadily improving operating margins over the medium term," Chairman Matthew Peacock said in a statement.
The company boosted its data erasing business with the acquisition of Blancco last April. It said the business has been successfully integrated and sales at the business are continuing to grow.
The rest of the software and advanced solutions business is made up of its set top box diagnostics business, and businesses that insure and repair smartphones.
Regenersis raised its interim dividend to 1.65 pence a share, from 1.32p a year earlier, even though it ended the half with net cash of GBP12.1 million, down from GBP20.6 million a year earlier, as a result of acquisitions.
"The board expects that full year results will be in line with market expectations and remains confident that the group's portfolio of businesses will generate further growth in group profit margins and substantial value for shareholders, and that the strategy being followed presents the opportunity for continued double digit growth in headline operating profit," the company said.
Still, Regenersis shares were down 8.7% at 207.00 pence Tuesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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