Manchester based technology services group ANS has reported that in the year to 31st March 2010 revenues grew by 10% to £13.3 million. Pre-tax profits fell by around 33% to £1 million however as the firm invested £0.5 million in appointing two additional directors, key sales and technical staff, infrastructure renewals and quality management systems. In the previous year the firm also benefited from highest interest income and higher gains on the disposal of businesses. Nevertheless, the company maintained the total dividend for the year at 4p per share. On the balance sheet net cash was very strong at £4.3 million, up £1 million over the year.

Highlights of the period included, in March 2010, the award of access to the Government Buying Solutions Framework Agreement, a deal which over three years allows the company to access areas of government projects that were off limits in the past. ANS is also one of only 13 companies to make LOT 2 of the Commoditised IT Hardware and Software framework agreement to supply IT infrastructure hardware, with potential contracts worth a significant value over three and a half years. The framework is estimated to be worth £6 billion turnover over the next three and a half years from which ANS Group as a supplier will benefit in part. In addition, in the ANS Managed Service business, recurring revenues have grown by 36% to £4.9 million.

On current trading ANS said that first quarter trading was well in advance of last year, with technical delivery team revenues at a record level. The order book is said to be considerably larger than that in 2009, with a number of orders closing in the three months to June. Into the rest of the year the group sees opportunities in the health sector due to the NHS’s focus on efficiency savings which ANS’s services can help clients to achieve. The firm’s exposure to the public sector remains at 55%.

At a mid-price of 122.5p ANS is currently valued at £14.79 million. The shares are on a historic price earning multiple of 20 times, which we think looks good value for a number of reasons. Firstly, the company’s investment in staff and infrastructure in the last financial year has put it in a good position too meet its target of reaching the £30 million revenue level. Secondly, the company has consistently proven it can deliver good levels of growth, with sales up 24% year-on-year for the past six years. Finally, the company has a very strong cash position, which can be used to make further value enhancing acquisitions or to invest in the current operations. The shares, which also offer a bonus 3.26% yield, are a buy.

* Worship Street Investments, which is managed by a subsidiary of Rivington Street Holdings, the ultimate owner of this website, owns shares in ANS.