eg solutions confident of improved full year despite half year loss
STAFFORDSHIRE-based back office software provider eg solutions is not letting a half year loss dent its expectations for the full year.
Latest interims show the Dunston firm recorded a £0.3m loss for the six months to July 31, 2015. However, it said this was due to the significant investment undertaken since the £3.2m placing completed in January.
This has enabled the business to invest in sales and marketing as well as developing two new flagship products. These products are will extend the firm’s position in the market and the board said it was excited about the opportunities they presented.
Commenting, chairman Duncan McIntyre said: “We have strong visibility and a building order book and look forward with confidence to the rest of 2015 with full year expectations now ahead of previous guidance.”
The firm said it had made further commercial progress in the first half, with underlying growth up as a result of several contract wins from new and existing customers and strong recurring revenues. Forward visibility for the full year is at a higher level than at the same time last year and the firm’s order book of multi-year contracts increased by almost 20% compared to the same period last year.
Revenues for the period were £3.6m, an increase on the £3.1m underlying revenues (excluding one-off deals) achieved in the equivalent period in 2014.
Gross margin was slightly reduced at 66% (2014: 74%) reflecting investment in Service Delivery resources ahead of increased revenues expected in the second half.
Cash at the end of the period stood at £3.1m.
Software revenues now represent 85% of the firm’s total (2014: 72%) reflecting the increased recurring revenues and licence sales in the period.
It has also seen an increase in its professional services software revenue, mainly as a result of customers seeking to upgrade to the latest versions and integrate the eg operational intelligence software suite into their core IT platforms using eg’s Multi-Channel Work Capture Tools.
It said forward visibility was now at a stronger level than at the same time last year and the company’s order book of multi-year contracts, to be recognised over the next 3-4 years, has increased to £15.5m (2014: £13.0m).
The board is not proposing the payment of an interim dividend.
The January placing enabled the firm to invest heavily in product development. Investment in R&D is up 70% on the corresponding period in the previous year. As a result, two new products; eg forecasting and eg mobile, have been developed and they will be launched by the company this evening (Wednesday) in a presentation at The View from The Shard in London.
The development of eg forecasting was part-funded by Innovate UK, the UK’s innovation agency, through its Smart scheme. Innovate UK offers funding to SMEs to engage in R&D projects in the strategically important areas of science, engineering and technology.
