Investment: ICM is cheap in a costly sector
Wednesday 23 September 1998
Yesterday the shares enjoyed a 12p bounce to 201.5p as ICM produced maiden pre-tax profits from continuing operations of pounds 3.43m, an increase of 36 per cent. Predictably, the results were well ahead of the pounds 2.85m ICM forecast at flotation.
The company has a decent business providing customer support and IT solutions. The most exciting division, however, is business continuity, which is a fancy description for rushing in with spare computers when a client's systems fail.
The unit accounts for just a small chunk of ICM's revenues but the market is growing at 20 per cent a year and the margins are better than average.
With 75 per cent of its revenues locked into long-term contracts, ICM has a stable base. It is also generating wads of cash - add in the flotation proceeds of pounds 2.1m and the company has an pounds 8.9m cash pile to spend on bolt- on deals.
There are two worries: first, companies may abandon business continuity plans as the economic environment gets tougher. Second, ICM may struggle as larger players enter the market.
Still, with house broker Henry Cooke forecasting profits of pounds 4m next year the shares trade on an undemanding earnings multiple of 14. In a largely over-valued sector, they are cheap.
And why are 'southern' ways of speaking spreading north?
Ten best places to live in the UK: Solihull comes top
Paul Walker autopsy: Results reveal Fast and Furious star's cause of death
Mysterious glowing ‘alien-like creature’ spotted in waters of Bristol Harbour. A jellyfish - or something fishy?
From 'terrorist' to tea with the Queen
Nelson Mandela death: his life in pictures
- 1 Cameron's freebie to apartheid South Africa
- 2 Nelson Mandela life story: An unconquerable spirit
- 3 Is this the scariest advert ever? Japanese tyre commercial comes with its own disclaimer and health warning
- 4 A forgotten episode in Russian history leaves links with the Philippines
- 5 Video: Students 'punched and dragged to the ground by their hair' as police break up demonstration
iJobs Money & Business
£50000 - £65000 per annum + benefits + bonus: Harrington Starr: Market Data SM...
£50000 - £70000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£70000 - £85000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£75000 - £85000 per annum + Bonus and Benefits: Harrington Starr: An award win...