News blog
Avisen
- BY: Andrew Hore |
- POSTED: 31/07/2011 |
Avisen has won a three year contract with Unilever and this could prove to be a key point in the development of the business.
It will take time to roll out the software, which will help Unilever to run its supply chain more efficiently. The software sale is in perpetuity but there are services on top of that. Recurring revenues are estimated to be up to £5m a year. Tesco Direct is another customer in this area.
Revenues from continuing operations grew from £2.28m to £2.63m in the year to January 2011. There were large write-offs and one-off items. Stripping these out, the underlying loss fell from £1.61m to £1.51m.
On the strength of the contract with Unilever, Avisen is expected to make a profit of £1.5m in the year to January 2012, rising to £2.5m the following year.
Storage Fusion, which has developed software that can analyse the use of storage and how to maximise its effectiveness, generated little in the way of revenues last year but this should become increasingly important.
Net cash was £313,000 at the end of January. Since the year end, Inca Software has been sold for £7.3m and £6m of that has been received in cash with the rest due to be paid in April 2012. The operations making up Inca had originally cost £4m.
Avisen realises that it needs to gain critical mass through acquisitions and it has cash to finance them. These are likely to be software-based business but Avisen is not interested in “basket cases”. There could be bolt-on acquisitions or purchases of businesses in tangential markets.
Avisen would prefer privately-owned business to take shares in consideration but the low share price will make that a more difficult sell to vendors – at least at the moment until the expected profitability is shown to be coming through.
At 5.62p a share, Avisen is valued at £12.8m.
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