Software firm EMIS offers both dividend income and fast profit growth Leeds-based EMIS is software supplier to GPs, pharmacies and NHS trusts. The company first came to AIM in 2010. Since then, EMIS has increased sales by 40% and net profits by 70%. Today, EMIS is one of AIM’s blue chip shares.
with doctor’s receptionists is possibly reason enough to own the shares. EMIS also works beyond the GP’s surgery, helping streamline referrals e.g. to physiotherapists. The company website claims some impressive efficiency gains: patient notifications being reduced from ten days to just one and community matrons spending one third of the time co-ordinating with GPs than was taken prior to adopting EMIS services. EMIS’ most recent trading
The Group comprises three divisions: GP services, pharmacy software and Secondary & Specialist community care programmes. EMIS is big and successful. Its quality customer base delivers high visibility of sales and profits. Three quarters of sales are recurring. EMIS’ achievements have been noticed by the market. The shares trade today on 18.1 times 2012 profits and 17.1 times forecasts for the year just past.
quality customer base delivers high visibility of sales
notifications reduced from ten days to just one A typical EMIS customer might be a practice manager within a GP surgery. EMIS frequently provides the tools to manage patient appointments, recall, report production and record access out-of-hours. EMIS also delivers a combined hardware/software solution to enable patient self check-in. That EMIS is helping people to avoid ever dealing www.aimprospector.co.uk
statement confirmed growth in all three main divisions with ‘positive contributions’ from two second-half acquisitions. The largest of these, completed in September, was Ascribe, itself previously AIM-quoted before delisting in 2009. Ascribe specialises in pharmacy, A&E and Patient Administration Systems. In the year previous, Ascribe reported an operating profit of £4.3m from £24m of sales. In the same period, EMIS reported a £24.1m operating profit from sales of £91m. The Ascribe acquisition brings EMIS established relationships in new markets and will make a significant contribution to group revenues.
EMIS reported revenues of £86m for 2012 and net profit of £19m. This produced EPS of 33p, 14.2p of which was paid out in dividends. The company is expected to report modest earnings growth with 2013 finals in March. Earnings and dividend growth is forecast to pick up in 2014 with analysts pencilling in double-digit increases in both. The shares have sold off somewhat in recent months, likely due to worries over the future of a GP framework contract. This has brought the 2014 P/E down to 15.1. A reasonable dividend is forecast, equating to a yield of 2.9%. EMIS enjoys a dominant position within a lucrative niche. As demand for healthcare services rises with an ageing population, the value of EMIS’ product and size of the market that it faces will both increase. The shares look like a great way to access some of the strongest trends in the UK health industry. Emis Group (LON:EMIS) FOR Shares the cheapest since July 2012 Industry increasingly looking to outsource AGAINST Just 6% earnings growth forecast for 2013 but a P/E over 17 Success will attract competition Market Cap Bid:offer
a dominant position in a lucrative niche
52week low:high P/E (forecast) Yield (forecast)
£377m 595.5p:600p 575p:860p 17.1 2.7%
Published on Feb 28, 2014