It’s really down to the joys of financial management that contact management software firm, Netcall, almost doubled first-half EPS, to 0.94p, as the underlying story still needs a lot of work.
Netcall seems hardly more than a holding company brand for Telephonetics, the erstwhile AIM-listed speech automation and data integration software player that Netcall acquired back in June last year (see Netcall starts to satisfy hunger - by overeating?). Indeed, 70% of Netcall’s £6.4m revenues (for the 6 months to 31st Dec.) came from Telephonetics; underlying organic growth was just 2%.
The margin story is getting weaker. Even without all the ‘nasty bits’, operating margins (adjusted EBITDA) went from 19.0% in H1 10 (to 31st Dec 2009) up to 26% in FY10 (to 30th June 2010) and then down to 18.0% in H1 11. IFRS operating profit was just above the red line but the tax loss brought net profit to £137k (+29%).
I’m speaking with CEO Henrik Bang and Group FD James Ormondroyd later as there is so much to talk about.