Planit's shares have barely moved since we recommended them in March, shortly after the computer-aided design and manufacturing (CADCAM) software group delivered solid interims.

It followed these up recently with encouraging full year results. These contained an 11.8 per cent rise in operating profit before goodwill to £3.8 million on a top line improved four per cent to £28.1 million. Pre-tax profits jumped 27.1 per cent to £1.97 million, largely due to a fall in interest charges following a drop in net debt by £1.7 million to £4.2 million.

These results were calculated when the dollar was at its weakest. Since then the exchange rate has recovered and, should the trend continue, further benefits should accrue to this promising company (last year US sales made up just over a third of revenues).

Chief executive Trevor Semadeni dismissed fears that a downturn in household spending might hamper Planit’s core business of providing software for kitchen designers and retailers. He maintains that, conversely, this means retailers will have more time to consider upgrading their software. Planit is also focusing on servicing customers and selling them additional products, such as training courses. Over the past year, growth has continued in the engineering markets and woodworking industries, particularly in the cabinet-making field. The group is also keen on making selective acquisitions and is currently in discussions with one venture. House broker KBC Peel Hunt retains its forecast for the current year of £3.6 million profits before tax and goodwill and 3.1p earnings per share. That gives a p/e of 7.3, which we reckon is too cheap. Buy.

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