Companies: AIE    MCGN    MOR   

In his latest missive, George O’Connor, the software and computer services analyst at Shore, has endorsed the prospects of Anite and Microgen but remains bearish on Morse.

Anite, the IT solutions and services business, should be treated as a turnaround according to O’Connor. Although its shares have drifted back to 55.5p, new management is apparently re-building the business and using disposals to clean its balance sheet. The new ‘financial rigour’ is matched by the re-engagement of clients in its telecoms, public sector, emergency services and consultancy divisions, so much so that O’Connor has a target price of 73p for the company.

The fact that acquisitive information management solutions specialist Microgen decided not to trump an offer by TietoEnator’s revised bid for Attentiv appealed to O’Connor. He is impressed that the company does not have a ‘Gatling gun’ approach to acquisitions but instead emphasises an improvement in process and benefits of economies of scale. ‘We like Microgen for prudently growing its business and never over-paying for M&A,’ he says.

Tough trading conditions for IT reseller Morse makes it a sell for the analyst. With its French business under-performing and the critical UK business suffering from a reduction in its infrastructure business, EBITDA of £4.3 million for 2005 compared to £8.2 million last year has been forecast. The prospective p/e of 18.1 is regarded as a bit ‘toppy,’ and although a restructuring is likely, further downgrades during the two-year transition period makes the stock a little too risky for Shore.