Norcon Plc

Providing project management and outsourcing services for operators of telecommunications networks including fixed line and mobile telephone systems and data networks, assisting them with the installation, operation or optimisation of telecommunications systems and to countries seeking advice on regulatory matters, defence systems, equipment and command and control facilities.

Norcon reports strong interim results, confident for full-year and beyond

Wednesday, September 09, 2009 by Andre Lamberti

Norcon PLC (AIM: NCON), a specialist in project management and outsourcing in the telecommunications, defence and IT sectors, said its long-term contracts and high levels of client retention mean it has good visibility for the rest of 2009 as it reported rising revenue and profit in the first half.

Revenue increased by 7 percent in the six months to June 2009 to US$37.4 million from a year earlier, while pretax profit came in at US$5.2 million, up from US$4.9 million previously.

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CEO Arnold Rorholt commented: “Our focus on delivering high quality services into emerging markets to our telecom and defence clients has to a large degree insulated us thus far from the downturn in the broader global economy. As regards our largest market, Saudi Arabia, we have signed contracts in line with our budget for the current financial year.”

Norcon expects the favourable performance achieved in the first half to continue into a satisfactory second half.

The company is pursuing additional project management opportunities in the defence sector where project spending is accelerating in the Gulf region. With its 30 years of experience in this area, it believes to be well positioned to capitalise on the substantial number of opportunities in this field. With typically long lead times, Norcon expects only a minor impact on revenues from this area in 2010, building into 2011.

As previously stated, the group is seeking profitable acquisition and joint venture opportunities. While retaining its focus on the Middle East and Southeast Asian markets, Norcon will continue to look at opportunities to further extend into the Asiatic and African regions and plans to pursue this strategy more aggressively in the second half of the year.

“At the date of these results, our long-term contracts and high levels of client retention mean we have good visibility for the rest of 2009 and we look forward to a successful outcome for the year as a whole. We ... continue to view the future with confidence,” the CEO added.

Broker FinnCap issued a note on Norcon, saying the strong interim report assures an excellent full-year result.

On valuation, the broker said the shares have enjoyed a mini re-rating as the group’s record and yield merits have become better appreciated, but a ready case can be made for a target price of 100 pence.

“The shares remain attractively rated with the high yield a particular feature," it added.

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Additional Information

Market:	AIM
Sector:	Technology Hardware & Equipment
EPIC:	NCON
Latest Price:	69.00p (0.00%)
52-week High:	85.50p
52-week Low:	64.00p
Market Cap:	33.15M

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