Tax Systems (TAX)

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A leading supplier of corporation tax software and services.

15-Jan-2018 – 80.9p – £65.3m – PER 16.8

Trading Update For The 12 Months To End December 2017 – In-line with a small reduction in Net Debt (to £20.5m). The Board is confident of a successful year ahead.

I just don’t like the numbers here generally – Below (industry) average ROCE and Operating Margin and the Net Debt (about 30% of Mkt Cap).

23-Apr-2018 – 81p – £65.4m – PER 16.8

Audited Results For The 12 Months To End December 2017 – LFLRevenue up 17% (2017: £15.1m, 20161: £12.9m), but still making a loss. Stockopedia has it forecast at £4.0m profit and EPS of 4.24.

I just don’t like this – And, the Net Debt, although reduced 16%, is still quite large (£20.5m). Probably because I don’t properly understand the accounting here (there’s much easier numbers to analyse out there) this is going on my Avoid list for now.

15-Jan-2019 – 88.5p – £71m – PER 20.1

Trading Update For The 12 Months To End December 2018 – Comfortably in-line, Net Debt down 32% to £13.9m. In a good position to drive further growth in 2019 (helped by the governments Making Tax Digital initiative).

Getting the Net Debt down is a good achievement here. I am going to move this from my Avoid list to Neutral but I guess I am concerned that there is perhaps a sole reliance on a government initiative.

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