25 May 2012

Netcall dials growth

17/01/2012 Miles Nolan

Customer engagement software firm Netcall (NET) has confirmed it is trading in line with market expectations for the year to December 2011.

In a brief trading update, Netcall says it has secured a good level of orders from new and existing customers, while it has also identified further opportunities to boost efficiencies. The AIM company also continues to generate cash - up from £5.9 million in June to £7.2 million at the year end.

We suggested buying the shares in November at 19.5p, largely due to the ongoing benefits of its Telephonetics acquisition. The deal brings considerable scope to cross-sell across the enlarged client base, which spans over 600 customers. Particularly as many are taking just two Netcall solutions out of a potential five to seven.

Moreover, the Eden package opens up new doors beyond traditional telephony to potentially larger markets such as data integration and workflow management. By helping customers increase efficiency and reduce costs, the solutions provided by Netcall are clearly gaining increased traction.

Broker WH Ireland predicts 2011 pre-tax profits of £2.5 million and EPS of 1.5p. Preliminary results are due on 27 Feburary, which should confirm the ongoing progress at Netcall. With a cash strong balance sheet, this well managed company has much further to go. Buy at 19.5p.

Tags: AIM market, Cash rich, New software, Trading is good, WH Ireland

Sector: Software & Computer Services

Companies: Netcall

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