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Bond International Software
- BY: Andrew Hore |
- POSTED: 05/04/2011 |
Bond International Software slipped into loss in 2010 as recruitment software sales fell but there was some improvement in the second half.
Revenues were flat at £32.4m, while a 2009 profit of £217,000 was turned into a loss of £1.19m. The main reason for the sharp turnaround was a lack of high margin software sales and some labour intensive projects. Services revenues grew and recurring revenues were 7% higher at £18.7m.
Acquisitions made a contribution to revenues but the rate of decline in the continuing operations was slower in the second half than it was in the first half.
Cash flow was strong last year and net debt was cut from £2.96m to £2.54m at the end of 2010.
The purchase of US rival VCG at the end of 2010 was financed by the issue of ordinary and non-voting convertible shares to TSX-listed Constellation Software Inc. Constellation owns 21.6% of Bond and it was a shareholder in VCG prior to its acquisition by Bond.
There are signs of recovery in its market but Bond tends to lag behind the recovery of its customers. Sales in Hong Kong and Japan are still building despite the Japanese earthquake.
House broker Cenkos forecasts a 2011 adjusted profit of £2m on revenues of £38m. On the adjusted basis Bond made a small profit in 2010. Cenkos excludes acquired intangibles and share based payments, which are expected to rise from £1.43m in 2010 to £1.67m in 2011.
At 46p a share, Bond is valued at £16.8m.
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