SMS Management and Technology Limited (SMX)

By Jason Fittler 

SMX is a well established IT services and business management company.

It provides a range of consulting services to a diversified portfolio of government and private sector clients.

The balance sheet is strong with no debt so the company is well placed to make acquisitions.

The company services around 85% of the top 20 companies listed on the ASX it also derives around 30% of it income from Federal and State government bodies.

The company has a diversified client base and solid income stream. They have a program of growth through bolt on acquisitions and intend to continue acquiring businesses.

The 2012 year is currently behind on budget mainly due to a reduced spending by the government clients and a slowdown in the decision making process by big business regards spending on IT.

They have a strong pipeline of opportunities but these are taking longer to get across the line at present.

The company has a forecast gross yield of 8.75%. It is currently trading around $4.90 and has a fair value of 7%.

I expect that this sector may slow down over the coming 12months as government spending slows in wake of an election in 2013.

I am comfortable to buy the company with a long term view for the yield and long term growth.  

For more information on (SMX) please contact us on 07 4771 4577.