News blog
eg solutions
- BY: Andrew Hore |
- POSTED: 23/09/2009 |
Operations management software supplier eg solutions managed to maintain interim profits even though revenues fell by 8% to £2.09m in the six months to July 2009.
Profits edged up from £53,000 to £56,000 thanks to cost cutting. This represents a strong recovery from the second half loss and was achieved despite a sharp fall in interest income.
Lower working capital requirements helped the cash balance rise to £592,000 at the end of July 2009.
There has been some downward pressure on the prices of maintenance renewals. The company has signed up the clients to three year deals to compensate for the reduced income.
Businesses increasingly need to measure the efficiency of their business processes so the outlook for the company is good. Larger customers, such as Legal & General and Nationwide Building Society, are buying software licences but are using their own staff to implement the software. This means that eg solutions does not need as many staff involved in the delivery of the software.
The second half of last year was particularly weak so eg solutions should be able to do better in the second half of this year. Analysts forecast profits of £300,000 for the year to January 2010.
At 28p a share, eg solutions is valued at £4m. The shares are trading on 15 times prospective 2009-10 earnings.
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