Investment: MMT pushes right buttons

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The Independent Online
ANALYSTS substantially upgraded their profit forecasts for MMT Computing earlier this year, but the results from the London-based computer systems consultants and software managers left even the upgrades far behind yesterday.

Turnover in the year to the end of August was up 50 per cent. After including pounds 800,000 worth of exceptional gains, profits rose 80 per cent to pounds 10m, compared with forecasts of around pounds 8.3m. Six months ago the consensus for the year was a mere pounds 7m.

MMT has been given favoured supplier status by a number of leading companies. Webbins, the software specialist acquired last year, quadrupled its contribution to pounds 1.26m, and MMT itself is working up new areas of expertise.

The company is already an approved supplier to Railtrack's asset management system. Both Webbins and Cortex, another subsidiary acquired last year that specialises in derivatives trading systems, have the chance of winning substantial new contracts in the United States, according to MMT's chairman, Mike Tilbrook.

Forecasts for the coming year have also been scattered to the four winds, and earlier upgrades from pounds 8.3m to pounds 10m are now being hastily revised again. The current year is likely to produce at least pounds 10.7m and earnings of 58p a share. Yesterday the shares fell 58.5p to 838.5p.

Support services can be a volatile sector as contracts with large companies come and go. And software stocks are no longer flavour of the month after their terrific run in the early part of the year was brought to an abrupt halt in the summer.

But a forward multiple of 18 does not look expensive for a company with a good track record.