London Bridge Software, a suppler of credit management systems to the global banking industry, has turned in an improved operating profit of £1 million for the six months to end June 2003, as headcount reductions and the consolidation of certain US operations counteracted a 12% decline in revenues.
Despite the slippage in revenue (£28.4 million versus £32.3 million in 2002), London Bridge reported increased cash flow from operations and a 10% uptick in license sales to both new and existing customers.
Consulting continues to disappoint, however, with turnover down 46% to £5.8 million. The company attributes the fall off to delays in deals being signed off, a lower level of license sales in 2002, and the effect of headcount reductions.
The group took a charge of £0.6 million in the first half as it layed off 45 staff and consolidated its US e-services and mortgage operations in Atlanta.
Shares in the banking software vendor drifted down slightly in early morning trading to 57.5 pence, but the group stayed in touch with its year high of 61.5 pence as the market looked favourably on the tight cost controls implemented by management.
London Bridge chairman Gordon Crawford says the company has started selective recruitment to meet anticipated demands for a pick up in consultancy work going forward. The vendor has also opened its new offshore development centre in Cape Town and recruited the first twenty staff.
Observing a "reduction in the number of viable of competitors", Crawford believes the group is well-positioned to take advantage of any market recovery. "Our pipeline of both contracted consulting work as well as prospective new licence sales is now better than at any time over the past eighteen months," he says, but cautions that new business still proves "difficult to conclude in a predictable manner".