Brady (BRY) signed a record 20 big licence deals last year and the risk management and trading software group doubled its client base. There was a substantial contribution from acquisitions, too, and operating profit before transaction costs jumped 40 per cent to £3.3m.
As it grows, Brady is commanding better prices and wining far bigger deals - the average value grew by three-quarters last year and licence revenue soared 87 per cent to £6.3m. However, squeezing money from cost-conscious clients in Europe has been hard work and a lengthy reorganisation of the energy operation following the purchase of Navista proved distracting. That's why services business grew a relatively modest 22 per cent to £7.3m. Shifting from an up-front licence model to more lucrative rental contracts has been slow progress, too, and mostly explains why recurring revenue was no more than 52 per cent of sales. However, chief executive Gavin Lavelle predicts maintenance revenue from the slew of new licence deals will grow that through 2013 and achieve 60 per cent before long. Buying SAI in November should help. Its metals recycling software has already pulled in "substantial" new business and could more than triple in 2013 to £5m, or 14 per cent of forecast revenue, according to broker Cenkos Securities.
The broker also expects an increase in group adjusted pre-tax profit to £6.1m, giving adjusted EPS of 6.5p (from £5m and 5.9p in 2012).
BRADY (BRY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 92p | MARKET VALUE: | £74.2m | |
| TOUCH: | 90-94p | 12-MONTH HIGH: | 106p | LOW: 78p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 151 | |
| NET ASSET VALUE | 52p* | NET CASH: | £7.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 6.17 | 1.04 | 2.73 | 1.20 |
| 2009 | 8.19 | 1.04 | 3.77 | 1.30 |
| 2010 | 11.1 | 0.62 | 1.69 | 1.40 |
| 2011 | 19.2 | 2.10 | 3.57 | 1.50 |
| 2012 | 28.1 | 0.80 | 0.61 | 1.60 |
| % change | +46 | -62 | -83 | +7 |
Ex-div: 24 Apr Payment: 21 May *Includes intangible assets of £40.1m, or 51p a share | ||||
