News blog

Prologic

  • BY: Andrew Hore |
  • POSTED: 07/08/2011 |

Retail software systems provider Prologic made a small profit before intangible asset write downs last year and it has started to make £1.1m of cost savings.

Revenues edged up from £9.75m to £9.86m in the year to March 2011 with underlying profit fell from £61,000 to £16,000. That was after a rise in the amortisation charge from £1.2m to £1.4m.

A move towards a SaaS model has held back short-term revenues. The market remains tough but Prologic is winning new business. Recurring revenues accounted for 54% of last year’s revenues so the company starts the year with a strong base.

The impairment figure of £7.8m includes £2.72m of net development costs written off. Prologic capitalised £2.32m of development costs in 2010-11. There is £3.08m of development costs left on the balance sheet. These are written off over a seven year period. Although it has not been indicated how much the amortisation charge will fall it will certainly be lower this year. 

House broker Arbuthnot has been forecasting a profit of £420,000 for the current year. That is effectively underpinned by the likely reduction in amortisation. The cost savings were started recently so there will not be a full year of them this year and there will also be restructuring costs that will offset some of the cost reduction that will come through. Arbuthnot says that it may adjust its forecast later in the year.

Net cash fell from £1.41m to £1.23m by the end of March 2011.

At 35p a share, Prologic is valued at £3.5m. If Prologic can build its revenues while benefiting from the cost savings then this valuation could start to look modest. 

© 2024 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Browse by issue
All issues
Popular tags
All tags

betbrokers, financial, gold, health, leisure, media, mobile, resources, services, technology

AIM Micro feeds

Keep up to date with articles published at AIMMicro.com. Subscribe to AIM Micro RSS Feeds