Dillistone Group (LON:DSG) (DSG, 145.0p, £8.21m), the global supplier of executive recruitment software, reports interims to 30 June 2010 are in line with full year expectations. Despite the challenging market conditions, revenues increased by 8% to £2.0m (H109: £1.8m), with recurring revenues up 1% to £1.2m, representing 60% of total revenues. Trading in Asia Pacific and UK, Middle East and Africa (UKMEA) was strong with a 77% and 17% revenue growth respectively. The rest of Europe continued to suffer with sales down 19%. Dillistone delivered adjusted PBT of £0.56m, up 19% on the previous year. The business is debt-free, with net cash of £1.9m (2009: £1.8m). The strong balance sheet has encouraged the group to maintain the interim DPS of 3.5p. The group’s broad geographical spread reduced its exposure to fragile economies such as the UK. We believe the group is well positioned to take advantage of the market when it recovers. The pipeline for the remainder of the year is strong, but we are cautious that weak macroeconomics may lead to slower than anticipated software sales.  The market forecasts 2010 PBT of £1.2m, EPS of 14.9p and DPS of 10.5p. The stock trades on 9.7x with a yield of 7.2%. The high yield is clearly attractive, however the 20% bid-ask spread combined with our belief companies may delay expenditure on new system sales, encourages us to reiterate our HOLD recommendation.  

Fulcrum Utility Services (formerly Marwyn Capital I) (FCRM, 15.5p, £23.92m), the nationwide independent supplier of gas connections to the unregulated gas market in the UK, reports prelims to 31 March 2010. The results are insignificant as they fail to account the acquisition of Fulcrum in July 2010. The trading update is positive. The Board remain encouraged by the “quality of the underlying opportunities that exist to improve future performance”. Initiatives to improve operational efficiencies have commenced. Relationships with key suppliers and customers have been reinforced. We remind investors this is a turnaround story. The new CEO, John Spellman, has an excellent track record within the industry, contacts across the supplier and customer network and success in turning around businesses to execute the business plan. Once the turnaround costs have been fully executed, the market forecasts 2013 pre-tax profits of £8.7m, trading on a prospective EV/EBITDA of 0.7x and a PER of 3.8x. On a 2010 revenue estimate of…

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