A MIXED BAG OF GOODIES
IF SHARES IN South African software solutions for retail leader UCS were a buying opportunity six months ago, they’re even more so now (the same could be said for many other shares). The value in UCS lies not in its earnings multiple – although that’s a low six times, based on the forecast for this year’s headline earnings per share – but in the prospect of internationalising its revenues and splitting off divisions, such as its software manufacturing arm, into separate listings. In its case, on the Nasdaq. However, the current global financial turmoil will have done little to advance its plans in that regard.
Over the past six months UCS’s price halved from 330c in late May to 165c late last month, before rising to 190c/share at the time of writing. But to be fair, even companies reporting sterling results have seen their shares taking a knock. And UCS hasn’t indicated it will please investors when it reports this week.
UCS said in a recent trading update it anticipated HEPS to be between 5% and 10% lower than last year’s: in other words, between 31,2c and 32,97c/share. It put that down largely to the one-off profit generated the previous year related to the creation and unbundling of product company Argility.