Northcoders Group (LON: CODE) is one of the better performers of the new AIM admissions from 2021. Last July, Northcoders raised £3.5m at 180p a share and the share price has doubled. The latest interims show that the software training provider is living up to expectations.
In the six months to June 2022, revenues were 117% higher at £2.4m and contracted orders mean that Northcoders is well on the way to forecast full year revenues of £6.5m. Pre-tax profit improved from £19,000 to £118,000. More students have been signed up than for the whole of last year.
The business services part of the business is growing strongly, and it has more than 50 corporate clients, including Rolls-Royce and Barclays.
Since June, the company has won a £4m contract from the UK government to provide scholarships for software training for individuals. The cash will fund software development and data engineering skills training by Northcoders.
There is a shortage of skilled software coders, and the wages are attractive. Northcoders is broadening the training it offers and is considering moving into cyber security training.
Higher wages could push up the cost base. WH Ireland has trimmed its profit forecast as a precaution. Revenues expectations remain the same, but 2022 pre-tax profit is trimmed from £800,000 to £700,000. The 2023 figure has been cut from £3.2m to £2.7m.
More than offsetting that is the estimate for R&D tax credits. This has been added to forecasts, which means that 2022 earnings are increased from 9.6p a share to 12.2p a share. At 360p, the shares are trading at 30 times prospective 2022 earnings, falling to ten the following year.