" 10 customers account for 30% of total revenues" I believe no one customer represented more than 5% of the business . I will ask Julian Wassell exactly what percent of the total revenue the loss represents.
The company acquired by their customer was a private company.
Broadly speaking I agree with that assessment and may now sell my small shareholding, still for a substantial profit and also after substantial dividend income. The news that they will lose a major customer is really the killer for me and I don't think they're particularly cheap anymore if earnings are going to drop permanently.
The balance sheet strength means they're in no danger of going broke but if they maintain that 5p dividend it is unlikely to be covered by earnings so the cash balance will be run down gradually.
The reliance on a few customers is also a concern.
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Today`s IMS states that their markets are broadly similar to those experienced last year.
Builders will have suffered this winter, but there is a lot of pressure to build more houses over the next few years . Add to this all the repairs that will be necessary, due to flood and storm damage, and builders and builders` merchants should do well. Whether or not this will lead to more business for EDP is another question: it should.
With this looming increased building activity, about now would be a good time to make an acquisition .They have been very patient in this respect. In the absence of a suitable acquisition , they will almost certainly return some cash to shareholders via a special dividend, as they have done on three occasions since early 2005.
EDP has been a sleeper for a long time . However, a quick look at the share price of a builders` merchant indicates growing optimism in the sector Travis Perkins ) . Since EDP`s shares are so illiquid, it will not take much buying to shift the price , if things do improve.
With 12.531m shares in issue at say 47p ,this equates to capitalisation af say £5.89m, with cash of £5.1 m and still as far as we are aware makng profits, I don,t think it is all doom and gloom, and won't be selling
EDP is an IT solution provider to the UK wholesale distribution industry and a supplier of Sales Intelligence software solutions more widely.
Turnover £3.13 million (2008: £3.47 million) reflects slow-down in economy generally.
Contracted recurring revenues remain strong at same level as last year and represent 74% of total revenues.
Adjusted operating profit £304,000 (2008: £505,000) giving an operating margin of 10%.
Profit before tax £340,000 (2008: £566,000 excluding profit on disposal of property.
Hosting revenues represent 22% of total revenues (2008: 19%).
Head count reduction after the period-end will generate annual cost savings in excess of £400,000.
Continued R&D investment of £573,000 in first half (£1.2 million in the full year to 30 September 2008).
Interim dividend maintained at 0.713p per share.
Share buy-back successfully completed after period-end returns £6 million to shareholders.
After the share buy-back the Group still has a strong, debt-free balance sheet and cash balances in excess of £2.0 million.
Michael Heller, Chairman of EDP, said:
"We remain cautious about the outlook for the second half and do not expect activity levels to increase during that period. However, with our strong contracted recurring revenues and significantly reduced cost base, we are well positioned to withstand the current economic turbulence."
I have been contacted by an american broker offering a sum of money for Restricted shares I hold in this company. I am not sure this is not a con. Anyone else got restricted shares in this company and had an approach?
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