WMS SET TO SOAR WITHIN THE NEXT FEW DAYS / WEEKS

Released to all clients of EVBG:

Wealth Management Software (WMS) Buy (unchanged)

Mkt Cap: £14.2m Net Cash: £1.9m Interims Price/TP: 34.5p (58p)
WMS earns an upgrade

Profit margins have improvedsubstantially leading us to upgrade our forecast for the full year. The decision to exit low margin business meant that H1 sales were down almost 34% to £4.0m but conversely profit margins rose from 9% to over 14%
generating EBITDA of £0.6m (H1’02: £0.5m). The relatively heavy
depreciation charge reduced PBT (ex-goodwill) to £0.37m a rise of 43%
(H1’02: £0.26) and EPS rose to 0.9p from 0.6p last year.
The market for financial services software continues to be a challenge, and
H1 revenues were substantially down year-on-year, relying on service,
maintenance and upgrade revenues rather than large license fees. Existing
sites are producing a stream of service and maintenance revenues. On this
income alone, the company has managed to substantially increase margins
and we expect this improved profitability to flow through into H2.
Yet the market is now bottomed out and license fees will come through. The
LISA software is inexpensive, easy to install and flexible in application. Two
contracts were announced in H1, for BWD Rensburg and Bankhaus Bauer in
Germany. License fees will be seen in H2 further improving margins.
On the back of these figures we are upgrading our full year forecasts to take
account of the higher margins achieved. Our forecast is now for EPS of 1.66p.
This leaves the stock on a multiple of 21x this year, however there is a
significant depreciation charge and valued on an EV/EBITDA basis, the
multiple is only 11x which is still cheap and the market could well support
15x. We retain our BUY recommendation.
Price Target: 58p

The more closer you look at the fundamentals its looks like a very strong buy in the short and long term. Hoping this week for a steady rise. According to several sources WMS is also in line to be tipped. Keep an eye out for volume increase within the next few days.