Clarity Commerce Solutions (LON:CCS) (CCS, 38.25p, £15.85m) Interims to September 2010 showed revs up 7% to £9.5m (£8.8m), gross profits of £7.91m (£7.05m), with margins up to 83.6% (79.7%), though that was offset by op expenses up to £8.3m (£6.42m) leaving the group in an op loss of £0.39m (op profit £0.63m) and a pre-tax loss of £0.41m (profit £0.60m). The group ended the period with net debt of £0.07m (net cash of £1.14m at the yearend). Slippage in contracts into H2 and investment in the business is blamed for the decline in H1 op profits, with a stronger H2 forecast, though the expectation of “steady growth over the short to medium” suggests it may not make up all the H1 lost ground – it hopes still to make its expectations for the year. The £0.7m increase masks a £0.3m decline as the Cyntergy acquisition in May contributed £1m. Underlying costs, ex Cyntergy’s £1m, rose from £6.4m to £7.3m, and underlining the acquisition did contribute to the bottom line in the part period. We maintain our 47p target price and thus the BUY recommendation due to the building momentum.
Coms Plc (LON:COMS) (COMS, 2.875p, £1.64m) has signed with Obsidian Telecoms plc to provide a mobile phone call savings package for the COMS customers, by aggregating the call minutes to access better call rates via a VOIP gateway. We maintain our SPECULATIVE BUY recommendation with the 5.8p year price target.
Nexus Management (LON:NXS) (NXS, 0.225p, £2.47m) Trading update for the September 2010 year end highlights revenues up from £5.5m to £6m (though in H1 H2 splits that means 2010 has seen £3.1m in H1 £2.9m in H2 as opposed to a H1:H2 split in 2009 of £2.5m:£3m). The group expects to report a considerable reduced op loss compared with last year – though this is below expectations. The Resilence Technology Corp related bad debts will be substantially reduced and orders delayed are hoped still to come into this financial year. Investors will be relieved to hear the group has generated cash from its operating activities. The share has recovered well since we held onto a “bruised” Spec Buy recommendation in October at 0.19p. Sitting on 0.5x price:sales the company could offer value –…
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