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.
Revenues hit by project delays
Norcon plc | Download | Published on 15/12/2010Norcon has followed up its relatively weak first half by warning that the second half will be in line with the first, due to delays in a couple of large projects. With costs also increasing, FY10 profitability will be over a third below our expectations, with a possible similar knock on impact on the dividend. The company has said that FY11 is expected to be in line with FY10. Our revised forecasts represent downgrades of 10% and 16% in revenues for FY10 and FY11 respectively, and roughly 39% and 41% in profitability and dividends for the two years. Even with the reduced dividend, Norcon still gives a 5% dividend yield, though clearly the risk profile has increased.