Broker N+1 Singer said the results showed the firm had "vastly improved" its performance
Companies: Diales Group PLC
Shares in Driver Group jumped 12% on Tuesday after the AIM-listed firm posted solid interims showing revenue up 18%, gross profit up 57%, and a swing to a pre-tax profit of £1m.
During the period the company successfully raised £8.5m to shore up its balance sheet. It also cut its headcount by 10% in a bid to reduce its cost base.
The EMEA region returned to underlying profit with increased utilisation levels, while Europe and America profit increased from £10k last year to £1.31m.
N+1 Singer covered the interims in a morning note, saying it confirmed a "vastly improved" first-half performance. Analyst James Tetley added that the steps taken by the new management team to address costs and focus on core activities had been reflected in the performance:
"Financial highlights include a 10% operating margin in the EuAm region and a reversal of last year’s losses in AMEA... The outlook statement highlights the Board’s confidence in achieving market expectations for the full year. The shares trade at a discount to most of the peer group on FY’18 forecasts, but we see room for this discount to narrow as management executes the strategy."
He said that following the company's £8.5m fundraise earlier this year; net debt had fallen to £3.5m from £10m in September, adding that cash collection was a priority of the Board, especially in the middle east.
Chairman Steve Norris said Driver's fortunes had improved "significantly" with today's interims showing a "dramatic turnaround" compared to last year. He added that the company was not complacent, saying there was much more that could be achieved:
"...we remain focused on delivering further profit growth and debt reduction over the coming months and years. The recent successful equity raise where we were fortunate enough to be able to call on both supportive long-standing shareholders and indeed to encourage excellent quality new holders to the register, has been central to allowing us to concentrate on the execution of our strategy to deliver significantly better returns than those of more recent times."
