Netcall

Following a first half dimmed by some product sales ‘slippage’, call-back, auto-messaging and workforce management solutions specialist Netcall has dialled in news of a better start to the second half-year.

Interims to December from Netcall, bossed by Henrik Bang, CEO and with respected Elderstreet Investments founder Michael Jackson in the chair, revealed a profits decline from £540,000 to £350,000 on lower revenue of £1.86m (2008: £2.01m).

Though disappointing, the numbers masked a half of strategic progress in which recurring sales increased 9% to £1.6m, to exceed operational costs and improve visibility levels and group operating costs were pared from £1.36m to £1.33m. Netcall, which helps clients including Prudential, Cable & Wireless and Standard Life improve profits and productivity whilst raising customer satisfaction levels, reports an encouraging start to the second half, ‘with early sales combined with a strong pipeline’.

Going forwards, there is much more to come from recent acquisition Q-Max, the workforce management provider bought for £2.5m in October, which is already yielding better cost synergies than originally envisaged. Bang believes the deal will bring cross-sell potential aplenty to Netcall, whilst Q-Max, adding 130 new customers (doubling the client base) has also opened up the growing SME contact centre market, where 30% of operators don’t currently use workforce management software, to Netcall.

Scouting for further deals in a fragmented market, analysts see Netcall growing its June 2010 top line to £4.4m and pre-tax profits from £980,000 to £1.06m. Swapping hands for less than ten times forward earnings, the depressed shares should now ring in some gains and thus represent a decent recovery bet.