Brady sees business wilt in challenging markets

Source: Brady

Brady, the leading global provider of trading and risk management solutions for metals, recycling, energy and soft commodities, announces its interim results for the six months to 30 June 2013.

Operational Highlights:

· Overall, high quality new business signed in the first half of the year, but at a slower pace than anticipated;

· Six significant new licence deals signed in the first half of the year and seven in the year to date;

· Progress in the Brady Energy business unit after substantial reorganisation in 2012, with two significant new licence deals signed (as rentals) as well as two significant service deals, all contributing to further build ongoing recurring revenues;

· Four new clients using the Brady Cloud solution;

· A total of 14 new client installations and go-lives throughout Europe, the Americas and Asia, with four clients going live in Asia, a key growth area;

· Initiated cost reduction programme in July which will result in annualised cost savings of £2.2 million which will start to accrue in the second half of the year; and

· Strong pipeline with advanced discussions in relation to several significant new licence deals.

Financial Highlights:

· Revenue up 23% to £14.9 million (H1 2012: £12.1 million);

· Underlying revenue growth of 8% for the first half of 2013 compared to the first half of 2012 (excluding the Brady Energy business unit, which was subject to substantial reorganisation in 2012);

· Recurring revenues up 27% to £8.5 million (H1 2012: £6.7 million) now comprising 57% of total revenue (H1 2012: 55%);

· EBITDA before exceptional items down 24% to £1.3 million (H1 2012: £1.8 million);

· Adjusted earnings per share down 52% to 0.91p per share (H1 2012: 1.88p per share); and

· Strong operating cash generation with £5.7 million of cash at 30 June 2013 (equivalent to 7p per share) and no debt.

Paul Fullagar, Chairman of Brady plc, commented:

"The Group has continued to grow revenue and signed a number of significant new licence and service deals in the first half of the year in what have been very challenging commodity markets. Business has been signed at a slower s been signed at a slower pace than anticipated with an impact on the results for the first half year and the 2013 outlook. Although markets remain tough, I am pleased that the Group has a growing pipeline and is in advanced negotiations in relation to several very significant new contracts, the revenue from which is expected to flow in 2014 and beyond. The Group's major focus is to secure these and other deals in the second half and to continue the momentum in the Brady Energy business following its reorganisation. I look forward to a busy second half and reporting further new client wins in due course. The increase in recurring revenues to £8.5 million is very positive and the increasing client base provides excellent opportunity to further grow the business. We continue to retain a strong balance sheet position, with a healthy cash balance and no debt."

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