Shares in staffing software company Bond International Software (BDI) rose 11 per cent to a three-year high post results, continuing their recent strong run. Revenues were fairly flat, but lower costs helped lift operating profits by over a third to £1.35m, and the company was upbeat on the outlook. "The staffing industry had a tough five years, but things are certainly looking up," says chief executive Steve Russell, adding that there has been an uptick in demand for staffing software in the UK and the US. Revenue growth is expected in the second half and into 2014.
The business is now seeing a shift in its recruitment software division in the UK and the US away from the traditional licensing of software in favour of a rental type Software as a Service (SaaS) structure. Mr Russell welcomes this change as SaaS gives a more visible revenue stream with customers locked in for a number of years, and also generates higher margins overall than the old style of lumpy licensing deals.
The HR and payroll division, meanwhile, benefited from a contract win with Carpetright and the government's move to auto-enrolment for employee pensions, while the outsourced HR and payroll services division is well placed to win further work with UK schools under its Strictly Education brand.
Broker Cenkos expects full-year pre-tax profits to increase by 22 per cent to £3.26m, giving EPS of 5.5p, rising to £3.8m and 6.4p, respectively, in 2014.
BOND INTERNATIONAL (BDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 83p | MARKET VALUE: | £30.3m | |
| TOUCH: | 80p-85p | 12-MONTH HIGH: | 44p | LOW: 85p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 94p* | NET DEBT: | 1% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 17.4 | 0.18 | 0.48 | nil |
| 2013 | 17.0 | 0.49 | 1.33 | nil |
| % change | -2 | +176 | +177 | - |
*Includes intangible assets of £31.6m, or 66p a share | ||||
