25 May 2012

Tikit catches IT outsourcing trend

10/03/2011 Robert Tyerman

Legal and accounting IT specialist Tikit Group (TIK) seeks higher margins through new services after lifting pre-tax profits 16 per cent to £2.9 million. The London-based company, which supplies IT services, consultancy and technology to law and accounting firms in the UK, continental Europe and North America, increased turnover 7 per cent to £26.9 million in 2010.

Chairman Mike McGoun says acquisitive Tikit, which spent £1.3 million cash on takeovers last year, including time and expense management software concern Carpe Diem, increased profitabiility with the help of cost savings and efficiency measures implemented in 2009. Consultancy revenues fell 12 per cent to £4.8 million, as customers cut back on non-core consulting and fewer large projects were implemented, but outsourced busness helped managed services rise 6 per cent to £14.6 million, while software sales gained a brisk 26 per cent to £6.3 million and other services lifted their contribution 19 per cent to £1.2 million.

Last year, AIM-quoted Tikit, steered by chief executive David Lumsden, launched a new 'total care programme' for customer relationship management (CRM) and won a three-year IT support and service contract with law firm Fox Williams. The company, which ended 2010 with cash up 46 per cent to £3.8 million, says it has continued to secure new business this year, citing recent wins for its outsourcing team, and is optimistic about prospects for its newly-launched Tikit Legal Office.

Tikit, which upped EPS by 22 per cent to 15.5p last year, is lifting its total dividend five per cent to 6.3p a share. Fans believe the company could make some £4.4 millon pre-tax this year, with EPS of more than 20p a share.

Floated in 2001 at 115p and recommended by Growth Company Investor at 160p a year ago, Tikit shares now trade at 258p, valuing the company at £38 million, with a 2.5 per cent yield and a prospective price/earnings ratio of 12.9. Hold on.

Tags: AIM market, CRM, Legal IT, Legal Office, Outsourcing

Sector: Software & Computer Services

Companies: Tikit

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