Companies: ITH   

Road traffic information specialist ITIS has motored in with a 300% profits surge for the half to September. Pre-tax profits leapt from £450,000 to £1.8m – more than the £1.5m operating profit turned last year – on 41% top line growth to £8.9m, with the core UK business buoyant off the back of rising demand for satellite navigation products.

The group’s big success has been its RDS-TMC (Radio Data Service – Traffic Message Channel) service, which is transmitted over the Classic FM network, and delivers ingenious real time traffic information to factory fitted navigation systems, as well as personal navigation devices and mobiles.

The service is selling to 18 car manufacturers including Porsche and Jaguar, and 17 aftermarket providers, and during the half, ITIS renewed its deals with BMW, Ford and the Dutch-listed TomTom.

Cash balances also improved considerably, from £5.7m at the year-end to £7.2m, and ITIS will update shareholders on what it plans to do with the cash pile when it unveils full year figures. The group says its blue chip UK client base, including good ties with Government, is also proving a valuable reference for a careful, low risk, licensing model-led push into international markets.

Given these stellar figures, which prompted upgrades from Altium Securities, bumper cash reserves, and a growing satellite navigation systems market, we think the shares offer compelling investment fare. For the year, investors might expect adjusted pre-tax profits of £3.5m from £17.9m sales, and earnings of 3.5p, placing the shares on a forward p/e of 17.6. Not expensive for a company forecast to deliver 66% earnings growth this year alone. Strong buy.

Itis Holdings	AIM	£13.55m	13.50p	-3.50p
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