Market's view on Dillistone
Published on April 2024
- Dillistone Group Plc reported increased margins and cost savings during 2023, with significant financial benefits expected from FY2024 onwards. They have improved their internal systems to provide services more efficiently, despite market downturns.
- Dillistone introduced a psychometric testing service enhancement to their ISV platform, targeting various industries, and have secured a notable recruiting firm in the UK as their first client.
- Capital investment in product development remained strong, with Dillistone Group capitalising £0.963m in 2023, slightly down from £1.007m in 2022. Amortisation of development costs was also reported.
- The company is perceived as undervalued based on R&D investment, indicating bullish growth prospects. Stock watchers apply a price-to-research ratio (PRR) analysis to gauge potential value, appreciating the company’s continuous investment in innovation.
- Dillistone Group Plc’s stock performance indicated a strong buy with significant trading activity, hinting at positive market sentiment.
- Concerns were raised about the company’s vulnerability to a takeover bid due to the current share prices and the distribution of share ownership among directors and significant shareholders.
- Discussions include potential strategies that directors might employ, such as converting loan notes to equity or buying more shares to stave off a takeover, addressing the company’s debt situation, and making operational savings through office space reductions.
- There is speculation about the possibility of a takeover, considering the adjusted operating profits and the share price potential compared to historical values.