eg solutions returns to profit as new contract wins result in 78% growth
STAFFORDSHIRE-based software firm, eg solutions, has seen a dramatic turnaround in fortunes; overturning a £1.4m loss in the previous full year into £0.6m pre-tax profit for the first half of this year.
The firm, which supplies back-office optimisation software to the financial services industry, said a healthy number of new contracts had resulted in growth of 78% for the six months to July 31, 2014.
Armed with a new board, the company has said current trading looks positive – although performance will be weighed against the first half – and it remains on course to meet full year expectations.
It said the six-month period had been characterised by continued investment in the infrastructure of the company to strengthen both its market proposition and its ability to deliver on new opportunities.
The focus now would be to continue this policy to both generate and support new sales of its market leading product suite, it said.
“There continues to be a number of factors driving the market forward as businesses strive for improved customer service, operational efficiency, cost control and risk management. These factors are driving increased demand for back office workforce optimisation solutions,” it said in its int6erim statement.
“The board remains focussed on creating a company that can maximise this opportunity and grow profitably, with revenue growth in excess of the market.”
Total revenue for the period was £3.99m (H1 2013/14: £2.24m). Software licences, maintenance and software services contributed 72% of total revenue (H1 2013/14: 83%, full year 2013/14: 76%) with the balance coming from implementation and training services.
Gross margin improved to 74% (H1 2013/14: 64%) as new resources employed in the prior year became fully productive.
As a result of the return to profitability the net cash generated by operations was £0.7m for the period (H1 2013/14: net cash used £0.1m).
Despite the turnaround, the board said it would not be recommending an interim dividend.
During the period nine new contracts were secured with new and existing customers. As a result revenues increased significantly on H1 2013. These contracts also led to a 20% increase in the user base for its software both in the UK and globally.
