Regulatory consultancy and training services provider Judicium has reported a third successive year of top-line growth in full year results to 31st March 2010. However, rising administrative expenses offset the impact of improving margins and a 3% increase in revenues to £1.58 million, resulting in a 34% narrowing in pre-tax profits to £0.2 million. Interestingly earnings per share for the year to 31st March 2010 increased by 10% to 16.55p as the business benefited from a £0.13 million tax credit. Management did not recommend payment of a dividend.

Despite tougher trading over the year the group’s balance sheet remained in a healthy position with net cash of £0.45 million and net current assets of £0.73 million. The group also generated £0.21 million in cash from operating activities which saw gross cash balances rise from £0.45 million to £0.64 million.

Commenting on its outlook the group stated that improving macro-economic conditions meant that it expected to continue to deliver “significant” increases in turnover and pre-tax profits in the coming year. In addition, the company added that it was in preliminary discussions with two possible takeover targets with it hoping to finalise one acquisition by the end of the financial year.

At a mid-price of 70p Judicium is capitalised at £1.38 million. During the year the business was affected by rising bad debts and a drying up of one-off contracts. Neither of these factors are expected to affect future earnings and with acquisitions also set to expand the scale of the group’s operations the outlook for its operations are certainty bright. More importantly on a historic multiple of just 4.2 (which falls to just 2.9 if one excludes the year-end net cash) means that the shares look very good value. Buy with only six trades in the shares in the past five years you might have to wait a long time to get your money back.