Hemscott: Shares in Epic Group jump
by Tom Stevenson
"Shares in Epic Group jumped 4.5p to 82.5p this morning after the
UK's leading e-learning specialist announced better than expected
half year figures to November. With a big exposure to high spending
government departments and an apparently unstoppable trend towards
online learning in the corporate market, Epic looks well set.
Epic's half year numbers to November were excellent. Turnover, up
39% to £4.6m, led to a five-fold increase in profits before tax
to £1m. Importantly, cash rose in line and Epic had over £10m in
the bank at the period end. That allowed a maiden dividend to be
paid, worth 0.4p a share.
The most encouraging aspect of today's figures was news that the
public sector customer base (now accounting for 50% of turnover)
has been boosted by a couple of contracts with the National Health
Service. A high proportion of the money earmarked by the Treasury
for the NHS will find its way into training and online learning
is bound to be a major beneficiary.
But Epic is not just a public sector story.
Private sector revenues were up 20%, driven by cost-cutting and
regulation. The main areas are finance (Royal
Bank, Lloyds etc), retail and, surprisingly, Telecoms and IT.
New clients in the period included Deloittes and the FSA, BT, Orange
and the BBC, evidence of the seriousness with which Epic is taken
by a range of very blue-chip customers.
House broker Altium raised its forecast on the back of today's figures.
It is now looking for £1.8m of pre-tax profit (up from £1.6m) and
£2.1m in the year to May 2004. Earnings per share should rise from
last year's 3.1p to 4.9p and then 5.8p...
Industry figures suggest e-learning will balloon over the next few
years and, with a strong balance sheet and reputation, Epic is bound
to be a winner. If you strip out the cash, the price-earnings ratio
falls to single digits. Good value."
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