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Advanced Computer Software - Sale of non core police unit pares debt

October 2011

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • ASW
  • Price:
  • 40.5p
Following last month’s main write up, ASW has announced it has sold Cedar HR Software to Capita for £15m cash. CHR provides rostering and duty management software and services to 30 UK police forces so was deemed non-core. For the year ended 28 February 2011, CHR had sales of £6m and made £1.5m after tax, an exit multiple of 10x. The proceeds will be used to reduce net debt, which stood at £25m and with cash generation strong, ASW is now expected to have net cash by its year end in February. Reflecting the sale, Singer reduced its eps forecast to 4.1p for the current year and 4.5p next. Keep on buy list. ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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