www.allocate-software.co.uk
Allocate Software plc is the leading workforce optimisation software applications provider for world-wide organisations with large, multi-skilled workforces. Using MAPS, Allocate Software’s workforce optimisation software application, organisations can deploy the right people with the right skills, to the right place at the right time, allowing Allocate Software’s customers to match operational demands with workforce supply.
With Corporate headquarters in London, regional offices in the UK, Sweden, USA, Australia, Malaysia, Allocate Software provide services and support to an international customer base across Europe, North America and Asia Pacific.
Allocate Software plc is quoted on the London Stock Exchange (AIM: ALL). For further information please visit www.allocatesoftware.com.
Resilient Allocate puts the building blocks in place for further strong growth
Allocate Software (LON:ALL) chief executive Ian Bowles said today’s interim results reflected a “resilient performance” set against the turbulent backdrop of root and branch change in the health service.
Allocate’s Healthroster package is used extensively by trusts to optimise staffing and the company derives around 45 per cent of its revenues from the NHS.
But while other operators have been hit by the hiatus created by reforms to primary care trust structure, the company seems to have weathered the worst of the storm, though the Dynamic Change business has been hit.
Allocate revealed it had landed 12 new NHS customers as it unveiled its interim figures earlier today.
Speaking to Proactive Investors, Bowles said: “The business is very resilient and the results speak to that.
“I think our core business stood up very, very well and I expect that to continue going forward.
“Over the period of the six to 12 months I would expect to see the Dynamic Change business bouncing back.
“With the cross-selling activity into our installed base in the UK and then taking that application into overseas markets, we will see that business come back.”
In the six months to November 30 Allocate’s sales grew 77 per cent to £15.9 million. Operating cashflow grew to £2.7 million in the period from £1.1 million a year earlier, and Allocate now has £5.4 million in the bank, a rise of £900,000 on the same period 12 months earlier.
At the same time, trading profit margins have expanded to 22.6 per cent in the period from 12.5 per cent.
David Toms, analyst at City firm Numis, went one step further than Bowles as he described the numbers as “exceptionally strong”.
He raised his target price for the stock by 7 pence a share to 96 pence and added: “Three competitor displacements bode well for Allocate retaining its high win rate, and cross-sales of the e-expenses and doctor rostering products accelerated strongly.”
Bowles, meanwhile, is laying the foundation stones for future growth. And in doing that he has brought in senior managers with big company experience such as Martin Jeffries as marketing director and Chris Farnath as head of international support.
Allocate has also drafted in a heavyweight non-executive director in Richard King, the deputy managing partner of accountant Ernst & Young.
“Yes I do want to scale up the business to build a successful, stable UK headquartered software business,” Bowles said.
“You need to move forward in stages. We can grow this business substantially in the next three to five years.
“We are on the cusp of becoming a £50 million market cap business.
“That is an important landmark. Below that you are subscale. For me the next big goal is to move us revenue wise towards a 50 million turnover business.
“It will take us another two to three years to get to that level. There is certainly that ambition in the company. And clearly as you go through the stages you have to strengthen the management team.”
“We are bringing some capability to the management team ahead of getting to the sort of ambitious growth positions we have got.”
While acquisitions have featured as part of Allocate’s expansion plans – it made two last year and has completed four in total – Bowles believes the business as it currently stands has plenty of scope for expansion.
“We are focused on driving very strong organic growth,” he added.
“We are not just buying companies to buy revenues and profitability. We will not make acquisitions to get to help us get to scale.
“We have a very strong and large customer base. So every new module or application we build or acquire will help scale and drive the business forward.”
Overseas expansion is also on the cards, aided by last year’s purchase of Time Care. Allocate will solidify TC’s base in Scandinavia, before a push into Belgium and Holland.
Bowles said he is looking to build on recent new business wins in Australia as well as targeting Canada as a new territory. “It is very similar to the NHS and the applications are as applicable to Canadian market as they are in the UK,” he adds.
