Share Name Share Symbol Market Type Share ISIN Share Description
Avisen LSE:AVI London Ordinary Share GB00B09LQS34 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 3.375p 0.00p 0.00p - - - 0.00 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 2.6 -7.8 -3.5 - 11.83

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DateSubject
20/1/2012
16:09
gleach23: so the share price ticks up on no volume to 4.25-4.75 interestingly you can sell 250,000 at 4.55 at present
07/10/2011
08:57
estienne: You can't take any of Winnifirith's T1PS seriously. He nearly always has a vested interest and you never know if he buys stock to make money on its share price or because he makes money by promoting it. I suspect there is a bit of both.
30/7/2011
10:46
colva: tsmith2, Strange that Philip Morrish the analyst who wrote the GECR note claims to have raised his target price to 10.6p yesterday , on 21st March he raised his target price to 11.3p , he also said that they had a 9.6m cash pile . 21st March 2011 Analyst: Philip Morrish Email: philip.morrish@gecr.co.uk Tel: 0207 562 3362 Avisen* - Major Divestment Strengthens Balance Sheet; Buy with increased target price of 11.3p (7.5p) Key Data EPIC AVI Share Price 6.375p Spread 6.25p - 6.5p Total no of Shares 226.7 million Market Cap £14.45 million Net Cash £9.6 million (est. post divestment) 12 Month Range 3.625p - 11.75p Market AIM Website www.avisen.com Sector Software & Computer Services Contact Marcus Hanke Chief Executive 07976 749408 Avisen, the performance management specialists, announced on 17th March that following an unsolicited offer it had agreed to sell its wholly owned subsidiary, Inca Software, to Logicalis UK Limited for a total consideration of £8.65 million. Inca Software is the largest UK IBM Cognos partner, providing customers with the full suite of IBM business analytics products and for the six months ended 31 July 2010 reported revenues of £4.318 million and a pre-tax profit £0.254 million respectively. Inca Software had unaudited net liabilities of £2.5 million as at 31 July 2010. Avisen will receive £6.0 million in cash on completion, which is expected on 1st April 2011 followed 12-months later by a further £1.3 million. Logicalis will also assume the net liabilities of Inca Software as at the date of completion, subject to a maximum of £1.35 million. Avisen will use the proceeds from the sale of Inca to further develop the Group's remaining business divisions, particularly the launch of its next generation SaaS Storage Analytics solution. Nevertheless, Avisen has not lost its appetite for acquisitions and now has ample resources to seize growth opportunities in the performance improvement sector as these arise, which should accelerate the group's growth potential. Over the past 18 months, Avisen has undergone considerable restructuring and we estimate, using our earlier indicative forecasts, that the underlying performance for the new group in the current financial year to 31 January 2012 is running at least as in the following table: Table: Reshaped Avisen, £million Year ending 31st January 2012 'Old' Avisen 'New' Avisen Avisen 3.7 3.7 Storage Fusion 1.0 1.0 Inca Software 2.3 1 Revenues 7.0 4.7 Avisen 0.9 0.9 Storage Fusion 0.2 0.2 Inca Software 0.4 1 EBITA 1.5 1.1 Source: Growth Equities & Company Research Note: 1 Full year pro rata to 3 months We believe that Avisen has a relatively predictable and steadily growing revenue stream. However, the wild card is Storage Fusion, which finally turned the corner at the interim stage and has been steadily growing although it may well record a small overall loss for the financial year ended 31st January 2011. Storage Fusion is involved in one of the global IT industry's hot growth spots, i.e., data warehousing and analytics, which undergoing considerable consolidation. Moreover, the business will launch its latest analytics software suite in the next few weeks, which should stimulate stronger revenue growth than our current expectations may be factoring in. Avisen's shares are trading at 6.375p and based upon estimated and adjusted 2012 forecast this indicates a relatively full forward looking P/E multiple of 13.3. However, P/E multiples do not necessarily indicate the underlying value of a business and we value Avisen on a sum of the parts basis. The cash pile as at 1st April 2011 should be £9.6 million (4.2p per share). Storage Fusion, which is an attractive asset in a currently hot and rapidly consolidating IT segment could be worth anything from £3 million to £7 million and we value it at £5 million (2.2p per share) and assume that it will be sold at some stage. Valuing the remaining core Avisen business which is growing strongly on a 10 times EBITDA multiple it is worth £11 million (4.9p per share) and that gives a sum of the parts valuation of 11.3p per share. We are increasing our target price from 7.5p to 11.3p and with such large upside potential our stance moves to Buy. Forecast Table Year to 31 January Sales (£000) Pre-tax Profit (£000) Earnings per share (p) Price Earnings Ratio (x) Dividend (p) Yield (%) 2009A 1 2,773 (102) (4.07) NA 0.0 0.0 2010A 2 5,906 (2,751) (2.11) NA 0.0 0.0 2011E 3 14,000 1,400 0.63 3 10.1 0.0 0.0 2012E 4 7,000 1,600 0.48 13.3 0.0 0.0 Source: Growth Equities & Company Research Notes: 1 10 months ended 31 January 2 12 months ended 31 January 3 Excludes exceptional items 4 Includes 3 months from Inca Software. *Avisen is a corporate client of Rivington Street Holdings the ultimate owner of GE&CR. The SF t1ps Smaller Companies Growth Fund, which is managed by an RSH subsidiary, owns shares in Avisen.
30/7/2011
07:31
tsmith2: Avisen* - Group Repositioned for Growth; Increased Target Price 10.6p; Reiterate Stance of Buy Key Data EPIC AVI Share Price 5.625p Spread 5.5p - 5.75p Total no of Shares 223.2 million Market Cap £12.55 million Net Cash £6.3 million (est.) 12 Month Range 3.625p - 7.85p Market AIM Website www.avisen.com Sector Software & Computer Services Contact Marcus Hanke Chief Executive 07976 749408 Avisen, the AIM quoted business technology and profit improvement specialist, released results for the 12-months ended 31st January 2011 on 27th July 2011 and understandably, those results do not fully reflect last April's disposal of Inca Software for a total consideration of £8.5 million to Logicalis that complete the group's fundamental repositioning nor the current growth potential of the core businesses. The group came to market through a reverse takeover in February 2009 and since then has been very corporately active. Although more recently shedding non-core activities and building up a development cash reserve, estimated at £6.3 million with a further £1.0 million of deferred consideration that will be received on the anniversary of the disposal of Inca Software. The reshaping has left Avisen with two operations: Avisen , a business technology and profit improvement operation, and Storage Fusion, a SaaS-based enterprise storage environments service. Nevertheless, the group's strategy remains to grow organically and by the acquisition of complementary businesses that strengthen its activities. Indeed, the group '... continues to actively seek new acquisition opportunities.' and we would be surprised not to hear something relatively soon. In the meantime, Avisen will concentrate on leveraging its recent significant success as a reseller of Acorn Systems' software while Storage Fusion will focus on developing and enhancing its SRA ( Storage Resource Analysis) product, which is beginning to gain traction in the market. The presentation of the group's statutory financial accounts are again complicated by corporate actions during and post the accounting period, principally the treatment of Inca Software as a discontinued activity following the agreement to sell the business in January 2011, impairment charges of £4.5m relating to the Xploite business as well as strategic, integration and other one off costs. Nevertheless, it is the underlying performance of the continuing businesses and whether there is sufficient available development capital that matters, and in the case of the latter there is currently at least £6.5 million in cash. Moreover, it is reassuring to note that both Avisen and Storage Fusion both made progress with combined sales revenues advancing 15.4% from £2.279 million to £2.631 million, of which Storage Fusion contributed £0.23 million for its 9 months since acquisition as a start-up business. The group's continuing businesses recorded a 7.5% reduction in EBIT losses primarily due to a considerably reduction in Avisen's loss from £0.565 million to £0.061 million although partially offset by a 25% increase in Head Office costs to £1.293 million and an initial loss of £0.127 million from Storage Fusion. Net finance expenses of £0.27 million (2010: nil) trimmed the improvement to a pre-tax loss of £1.513 million from £1.607 million. Table: Divisional Profit & Loss Account , £000 Year ended 31st January 2011A 2010A YoY % change Avisen 2,401 2,279 5.4 Storage Fusion 230 0 NA Revenue 2,631 2,279 15.4 Avisen (61) (565) (89.2) Storage Fusion (127) 0 NA Head Office (1,293) (1,034) 25.0 EBITDA (1,481) (1,599) (7.4) Depreciation (5) (8) (37.5) EBITA (1,486) (1,607) (7.5) Amortisation 0 0 NA EBIT/Operating Profit (1,486) (1,607) (7.5) Net Finance Income/(Expense) (27) 0 NA Pre-tax (1,513) (1,607) (5.8) Source: Growth Equities & Company Research The group's consultancy business, Avisen, grew revenues 5.4% to £2.401 million but recorded a considerably improved full year EBITDA loss of £0.061 million despite the costly piloting of Acorn System's profitability software to cornerstone clients, such as Tesco Direct and Unilever; the latter signing a multi-year contract on 14 th July 2011 to provide a Global Cost to Serve Solution to Unilever's Global Supply Chain and Customer Service Function; '... This contract will generate significant revenues over the next three years ...' , and we estimate that annualised revenues could be of the order of up to £5 million. Therefore, we anticipate that this division will continue to advance strongly and our forecasts do not assume any further conversions of Acorn System pilots – highly unlikely. Consequently the business should be comfortably profitable this year and going forward. Storage Fusion generated £0.23 million in revenue during its first 9-months of trading within the group but its heavy product development together with market research and promotion costs resulted in an EBITDA loss of £0.127 million. Nevertheless, the group believes that it has '...a highly compelling product which, with some further enhancements could bring significant revenues to the Group. Satisfaction with our offering was evidenced by a sale to a large bank in September 2010 and since the year end a sale to a worldwide information technology company who will be acting as one of our partners. We are also very encouraged by the pipeline of partner and storage vendor interest in our software offering and believe that this is likely to convert into sales during the second half of financial year 2012. ...' Consequently, our expectations for Storage Fusion, which allows for sales slippage, are for a strong advance in revenues during the current financial year but for continued losses due to the ramping up of its commercialisation programmes and the further costs associated with the on-going product enhancements as well as the specific development of the Enterprise Edition, which should be available from this September. Table: Divisional Profit & Loss Account, Forecasts, £000 Year ended 31st January 2010A 2011A 2012F 2013F Avisen 2,279 2,401 5,500 7,600 Storage Fusion 0 230 1,500 2,401 Revenue 2,279 2,631 7,000 10,000 Avisen (565) (61) 2,656 3,479 Storage Fusion 0 (127) (183) 214 Head Office (1,034) (1,293) (959) (1,151) EBITDA (1,599) (1,481) 1,514 2,542 Depreciation (8) (5) (47) (83) EBITA (1,607) (1,486) 1,467 2,460 Amortisation 0 0 0 0 EBIT/Operating Profit (1,607) (1,486) 1,467 2,460 Net Finance Income/(Expense) 0 (27) 33 40 Pre-tax (1,607) (1,513) 1,500 2,500 Source: Growth Equities & Company Research Finally, the group fully recognises that its greatest burden is Head Office costs, which will only be fully addressed through a significant scaling up of the group through complimentary acquisitions. Nevertheless, with revenues surging ahead at both Avisen and Storage Fusion, even on a very conservative basis and without any acquisitions, the group is becoming increasingly profitable as indicated by the above divisional profit & loss account table. We believe that the group has been finally stripped back to its long term core activities of Avisen and Storage Fusion, which individually appear to have exciting growth potential that should begin to become apparent when the interim results are released in mid-October and, therefore, no longer appropriate to value the company on a sum of the parts basis. We will now value the company using EV/Sales, EV/EBITDA and P/E metrics; initially adopting relatively cautious forward multiples of 1.0x, 5.0x and 9.0x respectively because of the considerable reshaping that has previously occurred and clouded the underlying performance. However, as the group delivers against its strategy we would anticipate raising these multiples towards industry norms. On a FY2013 EV/Sales multiple of 1.0x the indicative share price is 9.7p while a 5.0x EV/EBITDA multiple suggests a share price of 11.2p and a 9.0x P/E (discount of 51.6% to the sector's 18.6 multiple) a share price of 10.9p or an initial average target price for the emergent group of 10.6p (previous target price 9p). Therefore, with the shares trading at 5.625p and an increased target price of 10.6p, we reiterate our recommendation of Buy.
23/3/2011
12:42
someuwin: A Mid Month War Special Newsletter from the SF t1ps Smaller Companies Growth Fund ... "...One of your Fund's favourites, Avisen, announced on 17 March 2011 a binding sale and purchase agreement relating to the proposed disposal of the company's wholly owned subsidiary Inca Software Limited. The agreement, which is set to complete on 1 April 2011, has been settled for a total consideration of £8.65 million, made up of £7.3 million cash (£6 million on completion, and £1.3 million payable 12 months after completion) and the assumption by the buyer, Logicalis, of the net liabilities of Inca (up to a maximum of £1.35 million). The sale represents a solid return on investment for the company. The management is now set to use the sale proceeds to further the development of the remaining core business division which we believe to be performing strongly. Following the disposal of Inca the company is now focused upon organic growth through its next generation SaaS storage analytics solution whilst being in a materially strengthened, flexible position to pursue additional opportunities through complimentary 'bolt on' acquisitions. At 6.25p the company is capitalised at just £13.6 million. We reckon that net cash following the disposal is around the £11 million mark and that if the management so choose, Storage Fusion could be sold for anywhere between £3 and £7 million, let's say £5 million. We however reckon that the division is now running smoothly and should this year contribute roughly £1 million so a sale may not be on the cards. Assuming the above, the obviously undemanding market cap is to more than cover, leaving a strong core, rapidly growing business with good management which we reckon will this year deliver a pre tax profit of around £2 million, rising to £3.2 million next year, thrown in for nothing! The CEO Marcus Hanke spent a day with us in the Isle of Man this week and are we are convinced that the company, and its respective share price, is still more than unfairly being punished following the previously discussed boardroom fall out in summer 2010 and is quite simply unjustifiable. Needless to say we have been buying any stock that comes available at these levels (having also bought a good chunk at the 3-4p mark). A solid growth company, which Avisen is, should no doubt trade on a multiple of at least 12 (if not more) and we therefore, buying at around 6p, expect to almost triple our investment here." http://t1ps.com/shop/page-article/action-article.show/id-130011115
22/3/2011
09:43
topinfo: Taken from Sharecrazy today. Cheers Argy! ARGY2 - 22 Mar'11 - 09:35 - 76094 of 76102 TOPS not sure if you've seen this by TW about AVI this morning I think: "In between penning a few words for the statement we had the pleasure of a visit to the Isle of Man by Marcus Hanke of Avisen – one of our largest holdings in the SF t1ps Growth Fund. Larger after yesterday when we bought another line of stock. Those who argue that share prices reflect what is going on/that Warren Buffett could not exist should look at Avisen. At 6p odd it is capitalised at £13 million. Net cash – following the sale of Inca – will be c£11 million by the end of this year. The Storage Fusion Unit – which I had expected to be sold – is now doing so well it probably will not be sold. Its contribution this year will be – I expect – £1 million and that means that I'd expect a profit before tax (after tax as well as Avisen has large tax losses to provide shelter) for this year of at least £2 million. Next year that is at least £3.2 million. Now call me daft if you wish but an ex cash PE of 1 falling to 0.66 for a growth stock is just daft as a brush. A growth stock merits a PE of at least 12 so on that basis you are looking at a market cap of £33 million now rising to £50 million in a year – or a share price of 14.6p rising in a year to 22.1p. When I tipped this on t1ps eight months ago at 3.625p I said that it was arguably the cheapest stock on AIM. At 6 odd pence the story has got so much stronger that it remains, arguably, the cheapest stock on AIM. It is certainly in the top 3".
28/11/2010
18:01
themoneymonster23: Sure, here: Avisen* - Interims 46 Days ago (2010-10-13 12:25:27) Print this Article Avisen* - Interims Avisen* (AVI), the provider of business and technology consultancy specialising in performance management, has announced a headline loss of £6.58 million for the six months ended 31st July 2010. However, this does not reflect the underlying story here – with the loss including a £4.77 million non-cash charge for amortisation and impairment of intangible assets, £1.45 million of integration and one-off costs and £378,000 of losses from now discontinued operations. The net cash outflow from continuing operating activities was limited to £1.59 million and at period end net debt was £148,000, net current liabilities totalled £2.17 million and net assets were £7.87 million (though including £2.61 million of intangibles and £8.15 million of goodwill). The company's Avisen advisory and Inca software businesses both reported improved underlying pre-tax profit in the second quarter compared to the first (the former £219,000 from £37,000 and Inca £351,000 from £55,000). However, underlying head office costs of £551,000 for the six months and a negative £166,000 contribution from the Storage Fusion business from April's Xploite acquisition hindered the company's consolidated performance. Avisen reports that; - "the group has signed 70 new contracts with an aggregated value in excess of £3.2 million in the 6 months to 31 July 2010"; - "the Inca business has historically performed better in the second half of the year, with November and December being Inca's most profitable months"; - "the board is currently undertaking a full review... with the intention of making the (Storage Fusion) division profitable on a monthly basis. The Board firmly believes that there is significant value in the SRA software, however this has not been fully exploited to date" & - "more than £1 million of annualised cost savings have been achieved since the acquisition of Xploite", with the company also "actively looking to reduce head office costs in the second half of the year". These factors and the improved second quarter run-rate (as well as underlying profit, second quarter turnover - even excluding a £92,000 contribution from Storage Fusion - was more than 17.5% ahead, at £3.22 million, of that in the first quarter) means the company is looking "forward to the future with confidence" and expects its trading businesses to continue to improve their profitability. The shares are unchanged at 4.75p on the news today and, as per my update yesterday, have thus recovered a bit since a boardroom fallout saw them slump to below 4p a few months back. This led to me producing the formal t1p (available here) and the situation has also improved since then with it announced the day after the t1p that "Ian Smith no longer holds a notifiable interest in the company's share capital"; meaning a stock overhang had been removed. So what is Avisen worth? Is it really the cheapest stock on AIM? Yes. And here is why. As of today the company has, I reckon, net cash of c£2 million. Storage Fusion will be sold for anywhere between £3 million and £7 million. The non SF business will deliver an underlying pre-tax profit (on a zero tax charge) of AT LEAST £2 million this year and AT LEAST £2.5 million next year. So at today's share price Avisen is valued at c£11 million. Use the middle of the range SF value and the Enterprise Value is £4 million or just 2 times 2010 earnings or 1. 6 times 2011 earnings. For a growth company a fair rating has to be AT LEAST 10 times earnings so that gives you a 1 year value of £25 million + £7 million = £32 million or 14.2p per share. As per the t1p, at up to 6p, I continue to regard Avisen shares as a total nil brainer "buy". *Avisen is a corporate client of Rivington Street Holdings, the owner of this website, and the SF t1ps Growth Fund owns shares in Avisen. For further details on the fund visit www.t1psim.com or e-mail growthfund@t1psim.com
06/9/2010
22:43
tsmith2: AIM listed Avisen, the business and technology consultancy Group, has been in the headlines of late with a board room bust up allowing us to buy vast numbers of shares on the cheap. Avisen agreed on 11th March 2010 to acquire Xpolite through an all share consideration of £11.4 million. Xploite's main operational arm is Storage Fusion, a SRA software business focusing on storage analytics solutions. A subsequent consolidation of the two respective boards entailed with Ian Smith, Anthony Weaver, and Michael Frank, the Xpolite management, joining the Avisen board. What followed was a complete shake down of the amalgamated board, seeing the Xploite management subsequently leave to pursue alternative business. This rocked investor sentiment which was compounded by the maladroitly worded results for the year ended 31st January 2010, released on 30th July 2010. The results detailed and contained all the costs associated with the acquisitions throughout the year, plus the loss on the disposal of the South African non core business, announced on 14th July 2010. The results showed a notable increase in revenue to £7.2 million, but were undeniably hurt by the carelessly worded statement that the Group was trading in line with management expectations on a monthly basis. Following an increased pre tax loss of £3.1 million the wording of this statement was clearly unnerving, and made no attempt to satisfy shareholders that the Company was creating healthy revenue. Revenue will be further boosted once either Storage Fusion is fully consolidated into the business, or sold. The aligned Board's primary focus is now scalable organic growth, taking advantage of value adding acquisitions if the opportunity presents itself. The directorate changes sparked a topple in the Company's share price from 8.525p, with the Final Results compounding the misery, leaving the share price currently resting at 4.25p, equating to a market cap of £9.57 million. We are confident that the recent shake up and results do not convey the real picture and prospects of the increasingly consolidated business and technology service provider. The results contained £730,000 non cash charges for share based payments, as a number of options have been granted and vested, which hurt the bottom line even more. What has been missed by the majority of investors is that the company has added to it's Blue Chip clients, for example Tesco, and is expected to receive £2.15m as a deferred consideration associated with the earlier Anix disposal. We believe that the most recent results do not demonstrate the fact that all acquisitions have been integrated into the core business and in our opinion the Company, in it's current position is very capable of delivering £2 million+ of pre tax profits this year. We believe Avisen to have effective net cash of c£4 million, taking into account the Anix deferred consideration. We also believe that Storage Fusion will be sold, and we see a price of £5-7 million as realistic, but there is no rush to sell this asset. So at today's price the ex-cash PE is effectively zero. That is too low a multiple - we continue to feast.
11/8/2010
11:52
tsmith2: ARGY2 - why don't you have a chat with the company. Apparently we trade on an ex cash multiple of less than 1!!! Why corporate activity is picking up and how we play it Corporate activity among smaller quoted companies is picking up. Every day there seems to be something new afoot. That this is happening is no surprise to even the callow youths on our team, let alone to the venerable Robert Sutherland Smith, aged 147. Why, you may ask is this happening now? It is a story of buyers and sellers. Buyers, it appears, reckon that having survived the worst of the downturn, there is now some visibility of earnings and so they are encouraged to expand. And with small cap stocks - in many cases - trading on derisory multiples there are clear opportunities to buy and add value. Moreover there are now some sources of funding becoming available. The banks are, it appears, lending a little. Not a lot. But something is better than nothing. Moreover the equity markets are supporting fund raisings where there is a good story to tell - i.e. a good acquisition rather than just another bail out of a broken business plan. But there is something else happening - a willingness of sellers to accept realistic prices. I am not sure whether this is capitulation, a desire to sell out before yet another hike in CGT or just a natural process. But whereas two years ago (the last time there were corporate buyers out in force) vendors tended to value their company's in relation to a past (always higher) share price there is now a willingness to compromise and, consequently, more transactions are being completed or at least contemplated. History - and here we rely once again on Robert Sutherland Smith - shows that a pick up in corporate activity is the inevitable result of a sustained period of weakness in equity markets. That is the way capitalism works. If share prices fail to reflect underlying value then other mechanisms inevitably come into play. And as M&A activity starts to close the gap between share prices and underlying value then investors start tore-enter the market (on the sell low buy higher principle in which too many people always operate). The prize for those who bought low when others were droning on about a long term shift to the safety of blue chips or the death of the cult of equities or similar nonsense, is therefore clear. We note with interest that with small caps having made some gains already a report from Trustnet on 9th August that professional investors are starting to back the sector. You do not say. So how do we alter our strategy as we enter a new cycle of the market? Well we do not. As you know, our approach to investment never changes. We look to buy shares in good companies when the values are incredibly appealing and then wait. That can lead to short term underperformance as we do not claim to be able to spot the bottom in terms of sentiment. Anyone who makes that claim is, in our view, either a fool or a liar or a chartist or any combination of the above. So we have bought into value and now wait. When we have spare cash to invest we add to one of our existing holdings where we see the greatest untapped value and carry on waiting. So in recent weeks your fund has bought more Avisen (ex cash PE of 1) in a greedy way and has nibbled at ILX, Intandem, Northern Petroleum, Access Intelligence and one we cannot mention yet.
30/7/2010
20:24
ukinvestor220: UK Analyst Friday top star report is from GE&CR for ........ AVISEN !!!! Last woed: "Even on the basis of the business as it stands today, at 3.75p with a 10p target, our stance is Buy." *Avisen is a corporate client of Rivington Street Holdings the ultimate owner of GE&CR. The SF t1ps Growth Fund which is managed by an RSH subsidiary owns shares in Avisen 30th July 2010 Analyst: Philip Morrish Email: philip.morrish@gecr.co.uk Tel: 020 7562 3362 Avisen* - Strategic repositioning complete and growth emerging, Long term Buy Key Data EPIC AVI Share Price 3.75p Spread 3.5p - 4.0p NMS 2,000 Total Number of Issued Shares 225.27 million Market Cap GBP8.45 million 12 month Range 3.66p - 15.5p Market AIM Website www.avisen.com Sector Software & Computer Services Contact Marcus Hanke Chief Executive 07976 749408 Avisen, the business management consultancy and performance software provider, released its full year results ended 31 January 2010, a period of substantial corporate development since its reversal into Z Group on 2 February 2009. During the year Avisen made five strategic acquisitions that have had to be integrated resulting in exceptional charges. Sales revenues increased from GBP2.406 million for the 10-month accounting period ended 31 January 2009 to GBP7.165 million. Gross profit increased from GBP1.303 million to GBP2.354 million although the gross margin contracted from 54.2% to 32.9% due to the broadening out of the business activities although margins should move up again as integration benefits begin to feed through. The enlarged group reported a total operating loss of GBP3.109 million but this was struck after GBP1.339 million of exceptional charges. Consequently the underlying EBITA loss was GBP1.770 million while the underlying EBITDA loss of GBP1.726 million. Net finance costs amounted to GBP6,000 offset by a 'gain on bargain purchase' of GBP46,000 resulted in a reported pre-tax loss of GBP3.069 million a loss per share of 2.39p. However, the Avisen story is about a focused buy and build strategy and since the year end the group has disposed of its non-core South African activities and completed the all share GBP11.4 million acquisition of Xploite plc which was effected through a Scheme of Arrangement. The terms of the offer were 3.6 new Avisen Ordinary shares for each Xploite share. Xploite's main operational asset is Storage Fusion, a SRA software business, which strategically compliments and strengthens the group's existing consultancy and software business performance solutions. The group, following the successful integration of Xploite, has also restructured its executive management with Ian smith, Anthony Weaver and Michael Frank all leaving to pursue other interests while Mark Battles joins as non-Executive Interim Chairman and Claire Milverton becomes full time Chief Financial Officer. The enlarged group's strategy will be to continue to increase market share in the CPM market through increased service offering; optimise Storage Fusion, which as of last month is apparently breaking even by cross-selling to existing and prospective performance management clients; and further strategic acquisitions. Xploite strengthened Avisen's balance sheet and it is believed that the group will have net cash of around GBP5.3 million following the receipt of GBP2.15 million in September from the earlier sale of Anix. Avisen started the current year building upon the successful consolidation and integration of its earlier acquisitions and the momentum was not disrupted by the acquisition of and rapid assimilation of Xploite's operating asset Storage Fusion that is now trading at break even. We understand that Storage Fusion may lose up to GBP0.5 million EBITA this year. Nevertheless, the group appears to be generating annualised sales of around GBP14 million and an EBITA of around GBP1.9 million or a group pre-tax profit of GBP1.4 million after central costs of GBP0.5 million and a modest net financial income from its cash balances compared with last year's recorded loss of GBP3.069 million. With Avisen's shares trading at 3.75p the group is trading on an EV/EBITA of 2.25x and given the turnaround that is becoming evident for the group we would argue that a multiple of at least 6x would not be unreasonable or demanding, which suggests a target price of 10p. However, this target price assumes that the group cannot successfully deploy its cash pile and may generate the equivalent or higher returns than its existing businesses. Even on the basis of the business as it stands today, at 3.75p with a 10p target, our stance is Buy. Forecast Table Year to 31 January Sales (GBP000) Pre-tax Profit (GBP000) Earnings per share (p) Price Earning Ratio (x) Dividend (p) Yield (%) 2008A1 4,020 318 0.30 12.5 0.0 0.0 2009A2 2,773 (102) (4.07) NA 0.0 0.0 2010E3 7,165 (3,069) (2.39) NA 0.0 0.0 2011E3,4 14,000 1,400 0.636 6.0 0.0 0.0 Source: Growth Equities & Company Research Notes: 1 12 months ended 31 March 2 10 months ended 31 January 3 12 months ended 31 January 4 Includes Xploite for 6 months 5 Based on number of shares in issue following reverse acquisition of Z Group plc 6 Based on average number of shares in issue following completion of Scheme of Arrangement for acquisition of Xploite plc. 7 Total number of shares following Scheme of Arrangement for acquisition of Xploite plc will be 225. 27 million. *Avisen is a corporate client of Rivington Street Holdings the ultimate owner of GE&CR. The SF t1ps Growth Fund which is managed by an RSH subsidiary owns shares in Avisen
Avisen share price data is direct from the London Stock Exchange
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