Bond International Software grew its full year revenues but it is difficult to assess how well it will do in 2009.
Revenues grew by nearly 9% to £32m in 2008 and the quality of these revenues has improved with recurring revenues 23% ahead at £15.7m. That figure compares with annual admin expenses of £23.7m.
Profits fell from £5.11m to £2.83m. That includes an amortisation charge of £2.58m, against £1.88m in 2007. The capitalised investment dipped slightly from £2.85m to £2.79m. If Bond did not capitalise any development costs then the fall in profits would have been lower - from £4.2m to £2.56m.
There was net debt of £800,000 at the end of 2008. A £6m bank facility with Barclays lasts until February 2010.
Recruitment software remains the main revenue generator and the fall in profits came from this activity. This reflects the tough trading conditions in the recruitment sector. There was also a move from outright licence sales towards rentals, where revenues are spread over a longer period. Sales enquiries are still strong but buying decisions are being deferred. Medium-sized recruitment companies are not busying but larger and smaller ones are more likely to continue to invest in software. There are fewer customers buying in the US but Bond says it is gaining a greater percentage of them.
Recent acquisitions in the HR area have been integrated and £600,000 of annual savings made. This is an area where the majority of revenues are recurring. Outsourced payroll services is growing its revenues and profit contribution. The web-based services business spent more on development costs and that held back its profits.
The economic uncertainty is affecting short-term progress but the recurring income will help Bond to continue to prosper. Order intake is holding up well. There are a number of large potential deals but it is difficult to say when they will come through. Bond is keen to have a presence in Japan.
At 44p a share, Bond is valued at £14.5m.
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