A MIXED BAG OF GOOD­IES

Finweek English Edition - - Portfolio Pointers -

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.

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