Bond International Software (BDI), which sells recruitment and payroll software, benefited from its global presence and a recovery in industry demand last year. It increased adjusted operating profits by 23 per cent, swung from a net debt position of £1.8m to holding net cash, and bumped up its dividend.
There were some soft spots. Bond has been trying to shift towards earning more recurring revenues, which are more valuable in the long term, but these slipped by £244,000 to £23.4m. And its recruitment software revenues, which account for over half of total sales, slumped 12 per cent to under £18m as legacy product (as opposed to recurring) revenue fell and a large contract expired. But management expects a return to growth this year.
Bond also acquired Eurowage, which provides payroll solutions to clients in 65 countries, for £8.5m. The deal should broaden Bond's customer base and also boost its focus on recurring revenues - Eurowage largely enters into three-year rolling contracts. Its partnerships with US outsourcing specialist Paychex and global money-transfer business Western Union open up cross-selling opportunities for Bond.
In light of the Eurowage deal, broker Cenkos Securities has placed its EPS forecast of 6.4p under review and expects to increase it.
| BOND INTERNATIONAL SOFTWARE (BDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 95p | MARKET VALUE: | £35m | |
| TOUCH: | 92-98p | 12-MONTH HIGH: | 97p | LOW: 56p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 93p* | NET CASH: | £1.35m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 32.5 | 0.2 | 0.5 | 0.8 |
| 2010 | 28.3 | -1.5 | -2.4 | 0.8 |
| 2011 | 36.8 | -1.4 | -3.5 | 1.2 |
| 2012 | 35.5 | 0.6 | 2.3 | 1.8 |
| 2013 | 35.1 | 1.6 | 3.5 | 2.2 |
| % change | -1 | +193 | +53 | +22 |
Ex-div: 16 Jul Payment: 8 Aug *Includes intangible assets of £31m, or 84p a share | ||||
