News blog

Bglobal

  • BY: Andrew Hore |
  • POSTED: 12/12/2013 |

Smart meters software and services provider Bglobal continued to lose money at the interim stage but the core software business made an increased profit.

Bglobal has put its metering and data services business up for sale. There is no certainty that the business will be sold but at the moment this appears the preferred strategy for the company as smart meter installation continues to be slower than hoped. The company’s tax losses will also go with the meters business.

In the six months to September 2013, revenues improved from £5.82m to £6.17m and the post-amortisation, underlying operating loss declined from £1.66m to £1.41m. The metering revenues fell from £2.03m to £1.24m, while the underlying operating loss rose from £489,000 to £624,000.

The core software revenues increased their profit contribution from £143,000 to £359,000. Revenues were 63% higher at £2.97m - £2.38m of these were recurring revenues. This business helps energy suppliers to set up and will benefit from additional new entrants to the energy market as the government seeks additional competition in the market.

The energy management and training services divisions are losing money. Energy management is still a new operation and the operations are being built up and it is moving towards profit. There are plans to franchise the training operations in order to reduce the loss.

Bglobal has secured £1m of annual cost savings although some of these are in the metering business so the ongoing business will not benefit by that much. There will be slightly less than a full contribution from these cost savings in the second half but next year will get the full benefit.

At 7.88p a share, Bglobal is valued at £8.38m. Net cash was £1.22m at the end of September 2013 and this should be enough for the business until the meters business is sold – that should also reduce working capital requirements for inventories.

Download the latest AIM Journal from http://wwww.hubinvest.com/AIMPDFDecember2013_51.pdf

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