5 LSE Technology Stocks to Keep an Eye on in 2021

Summary

• The technology sector remained resilient during pandemic with increased demand for automation.
• The sector growth expectations index has seen a rise to 77.3 in Q12021.
• Tech stocks offering AI, cloud & automation have given a robust return since the beginning of the year.

The technology sector, which remained on the forefront during the pandemic, is experiencing a hiring boom in the UK. In Q1 2021, the industry witnessed the fastest rise in employment since Q2 2019. The surge is mainly on account of growing remote work opportunities due to the pandemic.

As per a latest KPMG report, the technology sector growth expectation index has seen a rise to 77.3 in Q1 2021 from 74.7 in Q4 2020, highest since Q2 2014. The industry’s positive growth outlook is a result of rising investment in artificial intelligence, cloud computing. Due to ease in restrictions from vaccine roll out business confidence has ascended.

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Technology companies have been making all-out effort to meet the rising demand, for their own business while they have risen prices, they are also working on cutting costs to improve margins. Let’s have a look at pursuits of few tech companies:

• Vianet Group Plc (LON:VNET)

It is an AIM-listed, Internet of Things solutions provider. It has been delivering actionable insights to its 300 customers since 1995. The firm has two business divisions: Smart Machines and Smart Zones rendering live data. It has more than 230,000 devices connected to its platform and many blue chip companies as customers. Vianet is one of the largest B2B (business to business) linked solutions suppliers in Europe.

The stock pegged at GBX 102.50, gaining 4.06 per cent on 28 April at 11:08 am GMT+1. It was near its 6-month high of GBX 103.00. Since the beginning of the year till date the stock has given a return of 16.02 per cent

In its latest trading update on 14 April, it stated its expectation of sales growth from key European markets. Vianet, despite the pandemic, said that it had strong financials, supporting it to take advantage of exciting future growth chances.

Recurring revenues have helped position the firm to gain from rising demand for data insight and contactless methods. With restriction easing all over the UK, it is expected to capitalise well on the momentum.

• Micro Focus International Plc (LON: MCRO)

It is a FTSE 250 index constituent delivering enterprise software to companies worldwide. It offers more than 300 enterprise-grade products and has 7,500 global partners. It delivers reliable and verified mission-critical software solutions for ongoing-upcoming needs of current digital world.

On 28 April at 11:24 am GMT+1, shares were at GBX 515.60, up 5.60 GBX from previous close. Since the beginning of the year till date the stock has given a return of 30.94 per cent

It recently posted an annual revenue of US $3,001 million for FY20, from its highly diversified and recurring revenue base. It was also able to generate annual free cash flows of more than US $700 million amid operating losses due to the pandemic. As reported in its annual report, to continue fast-paced delivery of projects it allowed 97 per cent of its staff to work remotely. It envisions continued growth and profitability in FY21.

• Kin and Carta Plc (LON:KCT)

It is a FTSE listed, global digital technology company. It delivers services across the digital transformation value chain. It offers digitally native management consultancy, modern cloud, data studios, and digital marketing platforms. With headquarters in London and Chicago, it nurtures engineers, strategists, and designers.

Its share was at hovering around GBX 175.50 on Tuesday, 28 April at 11:17 am GMT+1. Since the beginning of the year till date the stock has given a return of 201.37 per cent

In its half year results till 31 January, it posted net revenue of GBX 64.1 million. Results showed a recovery from pandemic with sustainable momentum. The company has also divested from non-core operations and shall Continue to focus on M&A opportunities.

Also Read: 10 FTSE Stocks Which Gave Over 100% Return in Last One Year

• Netcall Plc (LON:NET)

It is an AIM-listed provider of intelligent automation and customer engagement software. It provides low-code and customer engagement solutions. Over 600 organisations in financial services, insurance, and healthcare use the Netcall’s Liberty platform. Its customers include, Lloyds Banking Group, ITV, and Nationwide Building Society.

On 28 April at 11:07 am GMT+1, its’ share was trading at GBX 73.40, down 0.14 per cent. Since the beginning of the year to date, the stock has given a return of 122.73 per cent

In its half yearly report ended 31 December, the revenues were 9 per cent up as compared to H1 FY20. Strong revenue growth was seen in key market segments. Annual revenue run rate from Intelligent Automation was more than 40 per cent of the group revenue. The company is continuing to strengthen product portfolio, with Robotic Process Automation, as a number of customers are moving towards it.

Triad Group Plc (LON:TRD)

It is another experienced firm with expertise in technology-based business change. The tech company provides consultancy and advisory services by delivering solutions on various devices including desktops, tablets, and smartphones. Its customers include companies, such as Bahamas Maritime Authority, NHS, CWCG and the Electoral Commission.

Its stock pegged at GBX 123.50, down 1.20 per cent on 28 April at 11:22 am GMT+1, hovering around its 6-month high of GBX 123.71 GBX. Since the beginning of the year till date the stock has given a return of 357.52 per cent

In its last half yearly update for the six months ended 30 September 2020 it reported a revenue of GBX 8.7 million compared to GBX 9.0 million in 2019. The group has responded brilliantly to pandemic induced challenges because of the support of its key clients. The group successfully won places on the government's Artificial Intelligence framework. Its service offering on G-Cloud has substantially extended and it is the area where the company projects its future growth.

For More Insights Watch: Investing in Technology Stocks UK