Outlook: Operating margins rise to a record 8.3%
FY14 revenue was held back by the weak euro, but adjusted PBT was in line with our forecasts as costs remained under control. Hence, margins continued to expand and management is maintaining its target of double-digit margins by FY18. We have eased our forecasts due to the continuing strength of sterling against the euro, and amid some uncertainties in public sector budgets ahead of the UK general election. Nevertheless, the stock looks attractive trading on c 9x our FY16 EPS, while our DCF values the stock at 113p, or 34% above the current level.SciSys designs and delivers bespoke software systems, customized product solutions and professional services. Co. has four divisions: Space, which combines work for space institutions in specialist research and development with marketing and delivers commercial off-the-shelf software, and bespoke software solutions to commercial space operations; Enterprise Solutions & Defense, which creates software systems across defense, security and maritime, government and emergency services, and commercial business groups; Media & Broadcast, which provides radio broadcasting solutions, the dira! software solutions suite; and Xibis Ltd, which is a software house focuses on web and mobile-app solutions.
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