9th Apr 2014 09:14
LONDON (Alliance News) - Bond International Software PLC Wednesday raised its dividend and announced the acquisition of Eurowage Ltd, as it saw pretax profit rise in 2013 despite seeing a slight decline in revenue.
Bond International provides staff, human resources and payroll software.
The company proposed a final dividend of 2.2 pence, up from 1.8 pence in the previous year. It doesn't pay an interim dividend.
Bond posted a pretax profit of GBP1.6 million, up from GBP558,000 in the previous year, as revenue declined to GBP35.1 million from GBP35.5 million, but this was offset by lower administrative expenses and lower amortisation costs. Exceptional restructuring costs of GBP475,000 in 2012 did not recur.
The company is shifting its focus towards growing recurring revenues. However these recurring revenues declined in 2012 as a fixed-term contract with a client expired. Bond said it expects to see increases in its software-as-a-service revenues going forward. However, it warned this will be offset by reducing support revenues as it phases out legacy products.
The company said that it had seen an encouraging start to 2014, as trading conditions were good in its major markets.
In a separate statement Wednesday that company announced it will acquire Eurowage for a minimum of GBP8.5 million, with further payment based on Eurowage's financial performance in its first three years after acquisition.
Bond will pay GBP6 million in cash and GBP1 million in 1.1 million new Bond shares. It will also pay a deferred consideration of GBP1.5 million, to be paid two thirds on the first anniversary of the acquisition and one third on the second.
Bond also will provide a loan note for the value of Eurowage's net assets, capped at GBP4 million, and a contingent consideration of up to GBP9.5 million.
The total maximum payment for the company as a result is GBP22 million. Bond said it expects the acquisition to be immediately earnings enhancing.
Eurowage, an human resources and payroll company, had revenues of GBP3.9 million in 2013, and a pretax profit of GBP1.8 million.
Bond said that, as its payroll operations continued to grow and with its acquisition of Eurowage, it expects "another successful year in 2014."
Shares in Bond were trading up 4.8% at 97.94 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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