Investments made to drive growth delivered benefits in terms of increased revenue during H1 2011 (up 31% yoy to $4.4m) for AIM-listed training software and services firm NetDimensions. But the cost of sales impact of acquisitions increased too, driving up losses from $0.3m to $0.7m and basic EPS down from minus $0.01 to minus $0.03. However, the company says H1 is usually loss making.
For the full year to 31 December 2010 the profit was $255K and the EPS was $0.46. A similar or better turnaround can be expected this year given the seasonality effect plus the on-going positive effect of acquisitions on revenue (they contributed 11% to the 31% revenue growth figure with the rest being organic) and profits, and the addition of sales staff to push into the US, China and other emerging regions.
It is no surprise that NetDimensions is seeing growth in Asia and China. What is surprising in that it has “not yet seen a significant impact from the continued eurozone financial issues or the US budget crisis that led to a US treasury downgrade.” Of course that may still be to come and could knock its H2 results.
Training is usually one of the first areas to suffer during economic uncertainty but as NetDimensions provides training for several highly regulated industries including healthcare, financial and banking, and insurance, this appears to be providing a cushion. In general, training is holding up better in the private sector than the public sector - Pennant International did well in Q2 due to training contracts (see here), whereas ILX suffered as a result of UK public service costs (see here).