INCE Group (INCE ) has released its trading update for FY21 with revenue for the period slightly ahead of last year, despite the impact of COVID, with a strong balance sheet to fund growth during FY22.
Revenue for the 12 month period to 31 March 2021 was slightly ahead at £97m (FY20: £96.4m) with the overseas offices continuing their organic revenue growth trajectory.
Net Debt, as of 31 March 2021 was £7.1m (FY20: £6.9m) with cash resources available to fund growth of £10.8m, significantly up on last year’s £3.5m.
Importantly during the period, UK revenue recovered from the depressed levels seen in April and May 2020 with subsequent like for like performance broadly flat.
Importantly from an operational and financial perspective, the first new international offices migrated onto the Company’s proprietary practise management system to facilitate central case management and real time data reporting across the group. Additional international offices are also expected to migrate during FY22, which is expected to both drive efficiencies, reduce overheads and expand operating margins across the group.
Adrian Biles, CEO of Ince, said: "We are very pleased with what has been achieved in the last year and with the resilience of the business and its operations. This is due to the hard work and commitment of our people.
"The outlook for the current year is positive as travel and other restrictions continue to ease. Remote working is long established at Ince and we expect it to continue to some degree going forward but we regard the return to the office on a more regular basis as an important feature of the business.
"Ince remains well set on its growth trajectory."
View From Vox
Investors will undoubtedly be somewhat relieved the worst of the pandemic related issues appear to behind the Group as it moves into a strong FY22 trading period. As restrictions are eased further, we expect confidence and market activity levels will improve further. The recently announced initiatives with market leading technology suppliers to drive additional revenue growth will be seen as further evidence that the Company has developed a platform for growth with the ability to manage cashflow requirements on a group-wide basis with its new medium-term financing facility announced on 29 March 2021.
The shares weakened slightly on news of the FY21 Trading Update and currently trade at a ‘significant discount to the sector average’ according to analysts at Arden partners with shares on a current EV/Sales multiple of 0.7x. The Board will review its dividend policy on publication of the Full Yearly report, which could provide the catalyst for its re-rating.