Morse rises on bullish trading update
13 July 2005 | 4639 views | 0
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.