Companies: ITH   

Road traffic information supplier ITIS is paying a maiden dividend in the wake of another highly cash-generative year to March and management’s confidence about overseas offensives.

After the 1.5p per share disbursement, ITIS will be left with around £10m cash after vigorous operating cash flow of £4.8m during the year. This should provide ample headroom for it to pursue foreign forays with its ‘cellular floating vehicle data’, which relies on partnerships with major mobile operators. So far, incursions abroad include pilots in Australia, the Czech Republic, Spain and Ireland.

Founder and chief executive Stuart Marks believes it takes ’18 months to two years’ to build a decent sized business in a new country. However, with the company’s close relationships in the UK with 18 car manufacturers, 20 navigation device makers and mapping specialists – such as BMW, TomTom and the AA – he noted that ‘you’re not going from a starting point of zero’. Marks said he ‘expects’ to extend these relationships to the new geographies soon.

As the market leader in the UK, domestic growth will not arrive through the addition of new customers, as these are relatively finite – the TomToms and the BMWs – but only through those companies selling more navigation systems, which they are doing prodigiously, and by the provision of new services, which Marks revealed ‘are coming’.

Up 30% to £18.8m, virtually all of last year’s sales came from the UK, with high operational gearing towing profits up 144% to £3.9m – even before the £4.1m sale of IT IS’ navigation division.

Forecasts from broker Investec for 2008 and 2009, which include less than £1m annual overseas sales, put the shares on a p/e ratio of 16.9 and 15.9. A strong buy on these pages at 61.75p six months ago, the shares are still worth buying as the company rolls out its now-proven strategy overseas.

ITIS Holdings	AIM	£10.04m	10.00p	-1.00p
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