2nd Oct 2013 14:19
LONDON (Alliance News) - Proactis Holdings PLC Wednesday raised its final dividend as increases in subscription deals boosted revenues and profits in the full-year ended July 31.
The business software and support services company raised its final dividend to 1.00 pence from 0.75 pence in the previous year.
Proactis posted revenues of GBP8.0 million, up from GBP7.5 million. Revenues were boosted by 35 new deals, up from 28 in 2012, including 17 subscription deals that it said will result in revenue being recognised in future periods.
Chief Executive Officer Rod Jones told Alliance News that subscription deals were of more value to Proactis, but in terms of increasing the ratio of subscription deals, said "there's a limit to what we can achieve there." Subscription deals, Jones said, are steered by what the clients want.
"They are richer for us for the lifetime we have the customer," said Jones.
The company said pretax profit rose to GBP304,000, from GBP94,000 in the previous year. It said that it had made substantial cost reductions during the year that will begin to take effect starting in the new financial year, and anticipates the run rate of profitability will be higher as result.
Revenue from the company's consultancy services declined by GBP280,000, although Jones said they were comfortable with the division's sales. "We had a bumper year last year," Jones said with regards to the decline. The company has started offering managed services packages that might supplement this division, but Jones cautioned that this was still in its infancy.
Proactis said it had seen an improved gross margin of 69.7%, up from 68.5% in the previous year, due to its consultancy services being delivered mostly from in-house resources and the profitability of its hosting services improving after cost reductions.
The company recently entered into a joint venture with the Mittal family network in India and said it is interested in finding more global partnerships. But Jones said that Proactis would like to see its Indian agreements become successful first.
Shares in Proactis were trading up 1.2% at 25.80 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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