Trading update for the half year ended 31 August 2012
Advanced Computer Software Group plc (AIM: ASW; “Advanced” or the “Group”), a leading provider of healthcare and business management software and services, publishes a trading update for the half year ended 31 August 2012.
The Group expects to report first half results from continued operations with revenues up 20% (10% organically*) to no less than £56.7m (2011: £47.3m**), and adjusted EBITDA*** up 10% (8% organically*) to no less than £13.2m (2011: £12.0m**)
Adjusted EBITDA*** margin is expected to be 23% following the acquisition in April 2012 of Fabric Technologies (“Fabric”) for £4.6m and subsequent restructuring.
At the period end the Group had net cash of £1.5m (29 February 2012: net debt £1.1m). Cash conversionϯ continues to be strong at over 100%.
Advanced Health & Care anticipates organic revenue growth of 18% from continued expansion of its core patient care management software. Strong progress was made in building partnerships with NHS 111 providers and Advanced is now the preferred supplier to more than 70% of the NHS 111 market. Growth in mobile solutions continues to accelerate, and the Group’s target of 26,000 users of iNurse and iCare products by the year-end looks solidly achievable.
Advanced Business Solutions expects organic revenue growth of 5%, with continued demand from the public sector for shared services, procurement, budgeting and forecasting solutions, as local authorities and other organisations invest in technology in order to reduce costs. The division’s large customer base continues to be a fertile source of opportunity for Advanced 365’s cloud-based offerings.
Advanced 365 expects organic revenue growth of 21%, excluding the results of Fabric. The integration of Fabric, which provides managed services and unified communications to mid-market customers in banking and other professional services sectors, and the transition to higher margin lines from lower margin hardware sales, is expected to be fully completed by the year-end. Cross selling, in conjunction with Advanced Business Solutions, continues to be important for this division which signed a number of multi-year contracts during the period.
Vin Murria, Chief Executive said:
“We expect to deliver excellent organic revenue growth of 10% for the half year and are continuing to see good growth opportunities for our products and services in both the public and private sectors, despite the current economic environment.
“We continue to consider bolt-on and strategic acquisitions to support our organic growth through product enhancement, the opening up of new markets and the expansion of our customer base, to provide opportunities for our cloud-based solutions.
“Our recent acquisition of Strand Technologies, offering a web-based clinical application for community and mental health IT, coupled with our Investment in Avia Health Informatics, which provides a clinical decision support solution for primary care workers, will boost our penetration of the rapidly growing markets for care in the community and mental health applications.
“Overall we believe we are in a very good position to maintain our strong growth momentum and expect to deliver a strong performance for the year in line with the Board’s expectations.”
The Group expects to publish its interim results week commencing Monday 26 November 2012.
*Organic growth is calculated using the pro forma results for 2012 and 2011 as if all acquisitions were present on 1 March 2011
** Comparatives exclude the results of Cedar HR disposed in September 2011 – revenue £3.3m, adjusted EBITDA £1.2m
***Adjusted EBITDA is EBITDA before one-off restructuring costs, acquisition costs and share based payments
ϯ Cash conversion is cash generated from continuing operating activities expressed as a percentage of adjusted EBITA