Morse rises on bullish trading update

Morse rises on bullish trading update

Shares in Morse have soared after the UK IT services group reporting full year sales and earnings slightly ahead of expectations.

Morse stock was up 18.70% in mid-day trading to 88.50 pence, having earlier peaked at 90.50 pence.

In an up-beat and confident trading statement, Morse says it expects operating profit before exceptionals and goodwill for the year to June 30 2005 to be "not less" £9.5m, compared to £7.5m a year ago.

Group sales for the fourth quarter were £116m (2004: £107m), although this includes £11m from its French business which the group has now disposed of.

Full year sales grew to £428m (2004: £390m), including £43m from Morse France SAS. However, group revenues were propped up by the Diagonal consultancy Morse acquired last year - which contributed revenues of £45m. Furthermore, revenues fell seven per cent at the vendor's UK technology and integration in the first half.

At 30 June 2005, the Group had a net cash balance of approximately £37m (£34m at 31 March 2005).

Morse says it reduced headcount by 100 in the second half, producing annualised savings of £3m. The group has also reduced property costs by £1.5m per annum.

Earlier this week the vendor launched the MobileATM banking service that it has developed in parnership with Link. The service will provide end-users with real time, on demand access to personal financial information and allow them to perform simple banking transactions such as balance enquiries and mobile top-ups using their handset.

Morse says the service will be available to customers before the end of 2005.

The vendor will release full year results on 31 August 2005.

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