CCF Group Plc’s interim results tomorrow are expected to show that the financial software company is well on the way to doubling its pre-tax profits to UKP5m for the full year. And, judging by recent events there is a lot more for investors to go for in 1988. In the last week alone, CCF has […]
CCF Group Plc’s interim results tomorrow are expected to show that the financial software company is well on the way to doubling its pre-tax profits to UKP5m for the full year. And, judging by recent events there is a lot more for investors to go for in 1988. In the last week alone, CCF has made several important announcements. It has confirmed the setting up of a long-expected settlements subsidiary, announced several major orders, including its first installations in Tokyo, and revealed that US second quarter turnover was up 132% to over $2m. CCF Settlements Ltd, described by group marketing manager Melanie Kontze as the most logical extension of CCF’s software and bargain processing bureau activities, aims to provide a complete back office service to members of the Stock Exchange. From its City base, the new company offers software, staff and other expertise to stockbrokers wanting to concentrate on the retail end of things. The first customer is Debenhams, which has taken over the running of its own two in-store Share Centres from Paribas Quilter Securities Ltd. With stockbrokers – Debenhams is a member of the Stock Exchange – struggling to come to terms with the settlements backlog, and with Debenhams planning a further 40 Share Centres within three years, CCF Settlements looks destined to be a winner almost before it has started. Other major new growth areas for CCF over the next year are the line of banking software acquired with Downie Associates back in March (CI No 645), and foreign sales. Downie cost UKP3.9m in cash, UKP1m not due until next year, plus 1.6m shares. At the time of purchase, it was valued at UKP7.1m, but the recent rise in CCF’s price – 409p at the end of last week – has raised the price to over UKP10m. Even at that price, Downie, which made UKP1.1m pre-tax profit on turnover of UKP2.8m to May 1986 and around 40% more in 1987, looks a bargain. A previous acquisition, Business House Systems of Australia is starting to come on stream. CCF has also taken two orders from New York-based international financial organisations – Chemical Bank and Manufacturers Hanover Trust – for their offices in Tokyo. Combined with the work DEC in Tokyo has been doing on translating the Tuffs off-balance sheet package into Kanji, the new sites should give CCF a good base from which to build the Japanese operation planned for next year. On pre-tax profits of UKP5m – the City is mainly talking UKP4.6m to UKP4.8m, though several houses say they may have underestimated – CCF shares, given its high quality earnings and growth potential, seem to be undervalued even at 409 pence, up from 208p when the Downie acquisition was announced.
