Norcon delivers strong full-year results, upbeat about 2010 and beyond

Communications consultant and project management specialist Norcon (AIM: NCON) delivered a strong set of results for the year ended 31 December 2009.  The company reported 16% revenue growth to US$78.2m (FY08: US$67.7m), net profit increased by 20% to US$7.7m (FY08: US$6.4m) and pro-forma earnings per share increased by 20% to US$0.18 (FY08: US$0.15).

Norcon said its performance was driven by strong demand for its services, and supported by its existing relationships with core customers, with client retention rates remaining above 90%.

The company also highlighted its consistently strong performance over recent years, noting its five year (2005-2009) compound annual growth rates for revenue and  net profit, of 14.5% and 35.3% respectively. "We are very pleased to have met market expectations yet again this year following another solid performance from our operations in 2009”, Norcon chief executive Arnold Rørholt commented.

“Not only do our core client relationships remain robust, but we also continue to make good progress in expanding our presence in core target markets such as the Middle East, Africa and Southeast Asia where demand for our services is increasing”.

Norcon strengthened its net cash position by US$2.9m during the year, with a cash balance of US$7.2m at 31 December 2009. In line with its dividend policy, the company intends to return 50% of net income, US$3.86m, to shareholders through its 2009 final dividends. Norcon said it will announce further details in due course. Additionally, the company said it is also considering an interim dividend relating to the 2010 calendar year.

In terms of strategy, the company aims to grow its long-term outsourcing and project management business organically, with a focus on client retention and new contract wins in new territories. According to Norcon, it continues to look at opportunities in Southeast Asian and African regions, as well as in Scandinavia.

The company recently re-established an active office in Scandinavia, which is expected to evolve over time into a regional sales base. According to Norcon, Nordic countries remain at the forefront in rolling out the newest technology, and the company said it is targeting particular opportunities in Norway, Sweden and Denmark. In the Sweden and Norway, mobile network operators launched the new 4G network recently, and the network’s roll-out is planned throughout the region.

Looking ahead, Norcon said it has a good level of visibility over its target 2010 revenues and also for the following one to two years.  The company noted an increase in its potential product pipeline, which it believes bodes well for the future, and it has seen an increasing number of requests for its services.

“We are excited by the long term prospects that the 4G opportunity affords us in Scandinavia and elsewhere around the world”, Rørholt added. “We remain positive about our prospects for 2010 and are also confident that opportunities exist for Norcon to continue its strong growth over the longer term".

The AIM listed company provides project management services and consultancy for various types of communications networks. According to Norcon, network operators, particularly in emerging countries, regularly use external consultants to assist them in installing, upgrading and operating their various telephone networks.