Norcon plc (NCON)
ISR viewNorcon enjoys stable, long term consulting relationships with telecom operators, delivering consistent revenue and profits growth and a high dividend payout.
Norcon set to benefit from 4G/LTE
Norcon plc | Download | Published on 04/01/2012Telecoms consultancy Norcon announced in a pre-Christmas update that the year to December 2011 is likely to be in line with market expectations (broadly flat revenues and EBITDA of $69m and $7.5m), and has given a reasonably positive outlook for FY12 driven in part by 4G/LTE. The dividend policy is likely to be eased from the target 50% pay out to help fund growth. We publish for the first time our forecasts for 2012 which, given economic uncertainty, are broadly flat on 2011, but we have adjusted down our dividend forecast to a 20% pay out pending more clarity on a new policy. Norcon shares, at 33.5p, trade at just 2.4x 2011 EBITDA and 5.2X PE, well below the megabuyte Consulting and Systems Integration peer group averages of 6.5x and 10x respectively, whilst the dividend yield, even on a lower pay out, is likely to be not far shy of 4%. This seems a rather low valuation for a company that has weathered economic storms and has potential LTE/4G upside.