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Clarity Commerce Solutions

  • BY: Andrew Hore |
  • POSTED: 20/11/2008 |

Clarity Commerce Solutions is continuing the progress made in the second half of last year.

Management continues to appear upbeat about prospects despite the general economic malaise. They consider this is a year of consolidation for the business.

Revenues from continuing businesses increased from £6.78m to £8.33m in the six months to September 2008. Stripping out amortisation charges, Clarity went from a £906,000 loss to a £286,000 profit.

Net debt has been cut from £1.8m to £1.2m over the six month period and the second half tends to be better for cash generation. Bank facilities have been renewed on improved terms because the bank does not feel Clarity is as much of a risk as when it was losing money. 

There is also £4.1m of deferred consideration for retail software provider MATRA. Up to £1.8m will be settled in the year to September 2009 in shares and cash. The other £2.3m will be settled as loan notes - paying interest at base rate - over the next three years.

The retail software division performed strongly winning contracts with the likes of Universal Studios. The ticketing and leisure software businesses are steady performers. The main problem area has been hospitality but it has won a new order from Peel Hotels. 

Management is looking to reduce costs by £1m and most of this has already been done.

House broker Arbuthnot is maintaining its full year profit forecast of £1m. Management is confident that this is achievable.

At 13.5p a share, Clarity is valued at £4.32m. The shares are trading on a prospective multiple of just over three.

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