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Business Control Solutions

  • BY: Andrew Hore |
  • POSTED: 27/02/2009 |

Business Control Solutions has moved into profit for the first time since it reversed into Honeysuckle Group in June 2005.

Revenues fell 7% to £9.03m but cost cutting helped the financial consultancy and software provider to swing from a loss of £399,000 to a profit of £36,000 in 2008. BCS reported a first half profit of £29,000 so the second half profit was £7,000.

Consultancy revenues were slightly higher at £7.8m and staff utilisation rates were nearly 90%.

Software revenues fell 38% as a switch from perpetual to annual licences held back short-term income. Recurring revenues are running at around £800,000 a year.

At 1.375p a share, BCS is valued at £3.73m. Net cash is £2.78m and BCS is on course to generate more cash this year. Capitalised development costs were £514,000 in 2008 and these should be much lower in 2009.

The core customer base is financial services companies. They are showing interest in the company’s software but when they will invest in implementation is difficult to assess.

BCS has won a contract to supply Agent Reconciliation Control software to HSBC in order to provide it with agent bank fee data. This contract will generate most of its upfront revenues in 2009. This contract, and the recurring revenue, provides a strong base for the coming year. One more major contract and BCS should meet its revenue projections for the software for 2009.

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