Good morning!
accesso Technology (LON:ACSO)
As regulars will know, I've never quite been able to understand why the market chased this share up to such a huge market cap, given the lacklustre historic performance, but it's starting to make sense now with results for the 14-months ended 31 Dec 2013. They also include proforma figures for the 12 months to 3 Nov 2013, which enables comparison against the previous year.
Year end date changes are always problematic, as they skew comparisons for a couple of years, but in this case I can see the logic for moving to a more conventional 31 Dec year end. Also, given that it's a theme-park orientated business (supplying electronic queuing systems, and similar) then it's highly seasonal - with the vast bulk of activity occurring over the summer months, so having a 30 Jun interim period end should split the two halves more evenly going forwards, so it's a sensible move that has obviously been done for the right reasons.
Another accounting change that may happen is that the group is considering changing its reporting currency to US dollars, which again seems sensible to me given where it operates.
So looking at the proforma 12 month results, turnover is up 29% to £37.7m, and headline operating profit is up an impressive 53% to £4.7m. They have excluded £335k costs relating to an acquisition, and £810k of amortisation on acquisitions from this figure, which looks fine to me.
Adjusted 12-month EPS has risen 31.5% to 19.2p, so at 699p that puts the shares on a PER of 36.4 times. That seems to be well ahead of broker forecast of 14.5p. That rating is expensive, but given that the company is showing strong growth, and building recurring revenue, and seems to dominate a niche on its own, then I can see why long-term shareholders might be tolerant of such a high valuation. If you forecast forwards 2 or 3 years, then the PER would come down dramatically, as often happens with high growth companies.
Bear in mind that the group has made several acquisitions, so it's not clear (unless I have missed it) what element of the growth in profit has come from acquisitions, and what is organic? That is my main reservation here - is the high PER justified on organic…
