9th Sep 2014 09:45
LONDON (Alliance News) - Brady PLC, which provides trading and risk management software to commodity and energy trading companies, Tuesday reported a swing to pretax profit as higher revenue from the commodities and recycling industry more than offset a decline in its energy business unit.
In a statement, Brady said it made a GBP1.5 million pretax profit in the six months ended June 30, compared with a GBP144,000 pretax loss in the corresponding period a year earlier.
Revenue increased by 4.8% to GBP15.6 million though its advance was slightly held back by the weakening of the dollar and the Norwegian krone against sterling. According to Brady, exchange rate movements reduced revenue by GBP1.1 million.
Brady said revenue in its commodities business unit rose to GBP7.1 million from GBP6.0 million, while its recycling business unit saw an increase to GBP2.5 million from GBP1.8 million. The performance of those business units more than offset a decline in energy industry revenue to GBP6.0 million from GBP7.0 million. A one percentage point improvement to a 64% gross margin also contributed to the swing to pretax profit.
Selling and administrative expenses fell to GBP8.6 million from GBP9.5 million. Some GBP500,000 of that reduction was due to exchange rate movements, while GBP400,000 was due to last year's cost reduction programme in the energy business unit. Research and development expenditure fell to GBP3.7 million from GBP3.8 million.
According to Brady, delivering projects in the first half of 2014 gave "substantial improvement" in profit. For the second half, Brady said it still has a "significant" revenue backlog of contracts that have been signed but the revenue not yet recognised. Brady said this underpins the remainder of 2014 and beyond when added to the new sales in the first half.
It said the tendency to secure the majority of new contracts in the second half appears to be "trending again" in 2014, with "significant" new licence opportunities in "advanced" discussions.
Chief Executive Gavin Lavelle said Brady's first-half performance positions the company well for the rest of the year.
"The enthusiastic activity being demonstrated across all parts of the group, delivering both growth and healthy margins, gives me every confidence that we are on track to perform in line with full year expectations. Of particular note, the energy business has had a substantial pick-up in activity and that will be reflected in the second half results," Lavelle said in a statement.
"There is a substantial pipeline ,and I am looking forward to the second half with much enthusiasm," the CEO added.
Brady did not declare an interim dividend.
Brady shares were Tuesday quoted flat at 77.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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