Dillistone Group finals

Dillistone Group Plc is a leading global provider of software and services to recruitment firms and recruiting teams within major corporations. I have a holding in my growth portfolio (epic code: DSG).

Dillistone Group announced their full year results today with Revenue was up 6.5% to £8,625k.

 

The Dillistone Systems division revenue was £4,557k down -7.4%, due to holding back the number of implementations completed in the second half of the year, to enable the successful replacement of the FileFinder 10 product with the new FileFinder Anywhere suite, launched to the market in September 2014.  Incoming orders in the first quarter of 2015 are up on the same period in 2014 and a number of these contracts are larger than normal.  

 

Voyager Software was up 27% to £4,068k. These numbers included the FCP acquisition made in July 2013 and the acquisition of ISV in October 2014.

 

Adjusted operating profit (excluding all acquisition costs and amortisation) was £1,820k up 1.5% and adjusted EPS was 8.23p up 6.9% with reported EPS down -8.6% to 5.95p.

 

Free cash flow was £1,049k compared to £1,299k last year, operating cash flow was similar to last year, but capital and development expenditure was increased by £243k.

 

A final dividend of 2.7p was declared making a total of 4.0p for the year up 3.9%.

 

Commenting on trade in the first quarter, management stated that "...Group revenues in the first quarter are ahead of the same period in 2014..."

Results were clearly held back by the decision in the Dillistone Systems division to wait on new implementations in the second half, until the new FileFinder Anywhere product was available.  Dillistone Systems is the higher margin division, so had a disproportionate effect on results.

Although FCF has declined and the average number of shares have increased (due to the two placings), it still returns a FCF yield of 5.14% on the current share price of 106p.  As the benefit from the new software suite Filefinder Anywhere is delivered in 2015 and 2016, I would expect this FCF yield to increase.