Specialist software firm SciSys expects to achieve annual earnings for 2010 ahead of market expectations, following a better than expected second half.
In a trading update today the Chippenham-based firm, which supplies advanced software and IT to customers in the broadcast, space, defence and environment sectors, said it had also achieved an improvement in its net operating margin while its balance sheet has further strengthened with net cash of £4.8 million at the end of 2010.
“Earnings are likely to continue to benefit from a positive impact of a low effective corporation tax rate and the board anticipates that it will maintain its progressive dividend policy,” the statement said.
“The Company continues to trade well and entered 2011 with a comfortable order book across all business sectors.”
SciSys achieved a number of new contract wins during 2010 including for its broadcast division in Ireland and Belgium with orders expected in Oman and the United Arab Emirates.
Its government and defence division finished the year on a strong footing with an encouraging pipeline of prospects for 2011, having successfully diversified its mix of activities.
SciSys said its environment division’s short-term order book was solid and, although the medium-term picture was less clear, the prospective new business pipeline was sufficiently promising that the firm is optimistic the division will achieve its targets for the year.
Its applications support, space and media broadcast divisions are expected to be relatively unaffected by public sector spending cuts and have entered 2011 with healthy opening order books.
Overall, SciSys continues to face some uncertainty and pressure in the face of the public sector spending cuts, the firm told shareholders.
However, it is encouraged to see some public sector contracts begin to filter through after the hiatus caused by the spending review.
Combined with cost control measures taken in the last quarter of 2010, this leads directors to believe that the business is likely to enjoy further growth in sales, profits and net margins this year.
Chairman Mike Love said: “Although our first-half results were positive in 2010 we gave a note of caution at the time of our interim results about potential challenges to be overcome during the second half.
“I am pleased that our full year results are better than expected and that the company has been able to deliver a good performance.”
SciSys will report its preliminary results for the year ended December 31, 2010, on March 29.
