Tighter Corporate Rules in US Help Autonomy Progress ; THE INVESTMENT COLUMN

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Our view: Buy

Share price: 581.5p (+4.5p)

Autonomy had a stellar year in 2006. The internet software company's fourth-quarter results beat market expectations after it signed seven deals worth over $1m during the period. Revenue for the year exceeded $250m compared to $90m in 2005 whilst pre-tax profit more than tripled to $69m. The progress has not gone unnoticed, with Autonomy's shares gaining nearly 40 per cent over the year, which values the technology stalwart at over [pound]1bn.

Autonomy's context-based search software has become the industry standard after its acquisition of key rival Verity last year. The software allows Autonomy's customers to use the vast swathes of dormant data trapped in their servers and data centres for numerous applications from counter-terrorism to tracking customer trends.

Tighter US corporate disclosure regulations have helped drive Autonomy's progress over recent years. It is now set to benefit from updated civil procedure laws that require companies to maintain and track all electronic communications, including e-mail and voice calls. …