Bond International Software (BDI) edged closer to its key strategic goal of covering fixed operating costs with recurring revenues during the first half. That was helped by the acquisition of HR and payroll specialist Eurowage in April for a minimum of £8.5m (there are also bonuses depending on performance).
Eurowage's blue-chip customer base will help broaden Bond's international reach, and already contributed revenues of £788,000 from the acquisition date to the end of June. The deal saw the company take on debt: the year-end net cash position of £1.4m has turned to net borrowings of £5.4m. But that looks modest against cash flows of £3.2m during the half. In fact, Bond's chief executive, Steve Russell, says the group is still on the acquisition trail as it looks to firm up its market presence, particularly in the Far East.
Buoyed by a new three-year global recruitment contract worth $1.6m Australian dollars (£890,000), the company's revenues in the Asia Pacific region increased by 47 per cent year on year over the period. Asia, and Japan in particular, have been earmarked as a key market because of its size and the comparatively limited competition.
Broker Cenkos Securities expects full-year adjusted pre-tax profit to increase by 44 per cent to £4.6m, giving EPS of 8.6p - rising to 9.9p in 2015.
| BOND INTERNATIONAL SOFTWARE (BDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 118p | MARKET VALUE: | £43m | |
| TOUCH: | 115-120p | 12-MONTH HIGH: | 152p | LOW: 75p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 94p* | NET DEBT: | 15% | |
| Half-year to June 30 | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 17.0 | 0.49 | 1.18 | nil |
| 2014 | 18.4 | 0.77 | 1.42 | nil |
| % change | +8 | +57 | +20 | - |
| *Includes intangible assets of £41m, or 111p a share | ||||
