Growing its already strong margins and gathering new business momentum, recruitment software supplier Dillistone is one to watch in 2008. Late September saw the company announce a major new contract with the executive search arm of Hays, the UK’s biggest quoted recruiter.

Worth around £100,000, the contract was for the implementation of the group’s ‘FILEFINDER’ software system tailored specifically to the requirements of the search sector and followed a win of the same value with executive search outfit Norman Broadbent a month earlier. According to managing director Jason Starr, these successes took the value of new business orders beyond that achieved in the whole of 2006.

Sandwiched between these high profile wins, Dillistone dazzled investors with record interims to June which demonstrated a rising proportion of recurring revenues within the top line figure, illustrating improving earnings quality and visibility levels. Turnover grew by 14% to £1.92m – all geographic regions posted revenue rises – with pre-tax profits increasing by 18% to £658,000, with profit growth from Australia and the Asia Pacific region particularly eye-catching at 49%.

Boasting a broad spread of clients across 50 countries, Dillistone has good cash characteristics, having closed the first half with cash balances of £1.2m (the company is unfettered by borrowings) and already pays dividends. Having begun to track the company, our initial view is that a recent pull back in the shares, issued at 125p in 2006 and having peaked at 305p, presents a buying window.

Dillistone	AIM	£9.59m	177.50p	0.00p
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Other company articles:
Dillistone – debt free and delivering			06/10/2008
Dillistone Group			08/09/2008
Dillistone			15/02/2008
Dillistone Group			28/12/2007
Newcomer- Dillistone			15/06/2006