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magazineFDM goes for the hat-trick
IT services consultancy FDM (FDM) has beaten full year forecasts for the third straight year since the company returned to the stock market in 2014.
While the margin of outperformance through 2016 prompts broker Stockdale to push through only a modest 3% upgrade to pre-tax profit forecasts, it is certainly a feather in the cap for chief executive Rod Flavell and his team.
Stockdale is now expecting pre-tax profit to move from £30.1m in 2015 to £36.6m in 2016, before hitting £41.1m in 2017.
Shore Capital believes FDM is likely to outperform consensus expectations in the foreseeable future.
‘We think the shares are good value at current levels as there is an earnings upgrade cycle that will come over the next couple years and reiterate our “buy” rating,’ says Shore Capital analyst Peter McNally.
This should raise wry smiles among loyal shareholders following the panic sell-off in FDM shares directly following the vote for the UK to leave the EU on 23 June.
That sparked a 28% collapse in the stock from 590p to 425.5p, triggering the stop loss on the running Shares positive call, published on 17 March 2016 at 539.5p. The share price has since recovered all of that lost ground and more, now changing hands at 620.5p.
FDM has a proven record as a nimble, high-quality execution business with substantial UK and overseas growth potential. We remain fans. (SF)
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