A provider of software and services to the publishing industry, Ingenta (ING) announced half-year results in September with headlines including “Group revenues of £5.3m (2018: £6.4m)… Adjusted EBITDA of £0.3m (2018: £0.5m)”. However, also emphasised was “the board remains confident of achieving a material improvement in the trading performance of the group for the remainder of the year and beyond, as the benefits of the recently announced sales wins and restructuring begin to be recognised in our reported results” – and, importantly, these words have since been seemingly supported by management actions…
The noted revenue decline was stated “largely the result of implementation projects coming to an end. The new projects won in 2019 will start to deliver revenue from the second half of the year. Gross profit margins have increased from 38.8% to 39.6% as the group's restructuring efforts start to deliver results. In all, the group's direct, sales and administrative cost base has declined by over £3m on an annualised basis… The group expects to be profitable in the second half of the year as the new sales wins, combined with the lower cost base, flow through”. That compares to the prior year’s full-year results noting “adjusted EBITDA £0.8m (2017: £1.4m)” and, after particularly restructuring and other costs including a £0.3 million dividend, cash £0.8 million lower to £1.3 million. In the first half of 2019 though, noting “the fundamental changes we made to the business are delivering tangible benefits” and despite a further £0.3 million of both restructuring costs and dividends paid, cash was increased by £0.5 million to £1.8 million. This significantly benefitted from a near £1 million net working capital inflow, with the balance sheet also particularly showing receivables of £2.4 million (-£2.2 million), payables of £2.3 million (down £0.4 million) and deferred income of £2.4 million (-£0.7 million).
The results statement particularly emphasised “our commercial product offering is now gaining real momentum, in particular online content delivery solutions and our ability to deal with the ever-increasing complexity of rights and royalty management” – and October saw announced “2 further new deals for its Commercial software platform… the combined implementation and licence deals are valued at £425K with total annual recurring fees of approximately £40K”. It also saw Chief Financial Officer Jon Sheffield purchase £9,988 of shares in the company at 72p each and then November saw October 2018-appointed CEO Scott Winner purchase £15,950 of shares at 72.5p each.
A current 83p to buy, capitalises the company at approaching £14 million. The shares were 200p+ in 2017 and more than 100p as recently as late 2018 and, having since been sub 65p, now look on a recovery trail. Ahead of further updates we look to confirm this, at up to 87p, targeting a swift return to more than 100p, Buy.
Filed under: Ingenta, share tips of the year, Sound Energy, oil shares, readers tips, ShareProphets
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