Daily ShareChat: Diligent Board Member Services

Diligent Board Member Services, which produces technology for boards of directors, reported a fourth quarter result which showed an acceleration of the already strong sales growth the company registered in the first three quarters of 2009, says Roger Paterson, an analyst at McDouall Stuart.

"The 41 licenses sold during the fourth quarter of 2009 was a record for any quarter, beating the previous record of 30 licenses sold in the previous quarter and continuing the trend of increasing license sales in every quarter of 2009," Paterson says.

Diligent's revenue rose 70.8% in 2009 while its cost of sales rose only 16.4%, leading to gross profit of $US2.8 million ($NZ4 million). The bottom line was still a $US4.1 million net loss, although that was down from the $17.6 million loss the previous year.

Paterson says Diligent has logged six consecutive quarters of operating cost reduction and now expects to reach operational cashflow break-even in the third quarter of 2010.

He says it is only a matter of time before the market re-rates Diligent. "The market will not be able to continue to overlook Diligent if it continues on the growth path it has now established."

Once it reaches cashflow break-even it "will present as increasingly attractive as an acquisition target for a competitor."

BROKER CALL:  McDouall Stuart rate Diligent Board Member Services as buy.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.