of a company's governance, risk and compliance. They issued a profit warning at the end of September stating that current trading and anticipated results for the year ending 30 November 2013 would be below expectations. The share price dropped as a consequence, but has subsequently returned to the level it was before the announcement. The current market cap of the company is just below £7m.
Whilst profit warnings are unwelcome, I believe it's crucial to keep a perspective and consider the medium and longer term potential.
Even though trading was reported below market expectations, revenues will come in 5% above last year's at £8.4m and EBITDA is also ahead of last year. This is hardly a disaster or a company in trouble.
The company has recently made a substantial investment in a Development Centre in York on product innovation that is expected to drive growth for 2014 and beyond, and cash flows remain robust with the year-end cash expected to be approximately GBP1.2m.
Gross margins are very healthy at this company, and a high percentage of revenues are recurring.
There is a report on their website from Merchant Securities (March 2013) stating the investment case for ACC with a target price of 7p.
http://www.accessintelligence.com/downloads/07032013_accessintelligence_initiation.pdf
Hopefully, the missed expectations this year will prove to be a blip, and I can't see anything to suggest prospects for the medium and long term have materially changed. I continue to hold, and may add on any further weakness.
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