AdVal confident after £388,000 write-off

Aim-listed e-learning group AdVal says it is 'confident' despite losing £181,000 last year, and claims a 'record number of prospects are in the pipeline', writes James Crux.

AdVal (ADL) says it has an order book of £2.2 million with a record number of prospects in the pipeline. New clients signed up in the year to March include RM Automotive, The College of Law, Eversheds and London Underground, and more recently Sweet & Maxwell and Rank Leisure.

Chairman Sir Jeremy Hanley says 'we are confident for the group's further development and for the outcome for the full year'. This is in spite of 2000-01 losses of £180,732 after exceptional costs.

The losses arose because the board decided to write off £388,119 of software development costs expended in previous years. Before exceptional costs, AdVal made a pre-tax profit of £207,387 and more impressively, before interest, tax and depreciation, earnings rose 92 per cent to £583,000.

Sales were boosted by 44 per cent to £4.73 million, helped by the company's joint venture with Pearson FT Knowledge, KeyKnowledge. This is an 'off-the-shelf titles provider' formed in January, whose first four titles include a tool to help buyers in product selection, and another package focusing on the call centre market.

After taking a stake in connect2law, AdVal bought out the other shareholders in favour of an exclusive deal with the The College of Law. The first course, a professional skills course, is currently under development and other programmes include an anti-money laundering programme for Denton Wilde Sapte and an induction programme for Eversheds staff.

Acquisitions after the year end included Testline, which provides software testing for e-learning programmes and IT infrastructure. Another, Terra Nova Media, provides internet services for businesses.

On the news the shares jumped 4.5p to 46p. Guy Peters at Old Mutual Securities says that for the current year, he will be looking for sales of £7.6 million, a pre-exceptional pre-tax profit of £800,000, and earnings of 2.4p.

This puts the company on a prospective p/e ratio of 19.1, slightly lower than the sector average of 22.9.