Some bright spots amongst the clouds

(By Anthony Miller – Monday 27th April 2009 8:15am). Today brought results and trading updates from three UK SITS players, each with a ray of hope for the year.

AIM-listed Advanced Computer Software (ACS) presented its maiden prelims for the 14 months to Feb. ’09 (see here) though in effect these covered its six months as a trading business after the Aug. ’08 reverse acquisition of Out of Hours (OoH) hospital software specialist Adastra (you can see the history here). Pro forma revenues for the 14 months are now £15m, with some 65% recurring. Adastra has a near-monopoly in OoH operational hubs and (only!) 50% share in NHS walk-in clinics. With nearly £15m cash in the bank, CEO Vin Murria is looking for other primary care businesses to bolt on. ACS’s shares were 17p at the time of the Adastra acquisition; they closed last week at 27p. As the procurement shackles of the NHS National Programme for IT increasingly get loosened, it’s just got to look better and better for niche players who can actually meet a real need in the health service.

The second ‘bright spot’ came from trading systems supplier, Fidessa. After a very impressive 2008 (see Fidessa capitalises on financial markets downturn), CEO Chris Aspinall reported ‘early signs of recovery in the market’ (see here), though did not think this was necessarily sustainable. Short-term visibility remains poor, but Aspinall hinted at FY growth at the upper end of market forecasts, which seems a pretty bold punt to take just now, I would have thought. Readers of our IndustryViews Quoted Sector review will know that Fidessa’s shares were the real stars in the FTSE SCS index in Q109, up 65% since the end of 2008, with another 18% rise since then!

Finally, translation software and services supplier SDL’s IMS (see here) also followed a good year (SDL translates service into profit) with an above-expectations quarter and sees an in-line year. SDL’s shares are up nearly 50% ytd.

Rather than seeing these reports necessarily as signs of the ‘green shoots of recovery’ – indeed we think there is still more company bad news to come – they show that even in a downturn, companies with ‘right time, right place’ products and services can fare very nicely.