eg solutions benefits from strong demand

IMPROVING demand from financial services for its products has helped to improve the performance of Staffordshire software supplier eg solutions to the point where it expects a growth in pre-tax profits.

In a year-end trading update, the firm said trading in the second half of the year had continued the strong momentum reported at its half year results in September.  

“Results for the full year were in line with market expectations with revenue expected to be approximately £5.1m (2010: £4.2m) and profit before tax approximately £0.3m (2010: £0.1m),” said the firm in its statement.

The company said it was maintaining tight control over costs and this had resulted in improved margins and cashflow.  Net cash at January 31, 2011 was £0.5m, which compares with £0.8m by July 31, 2010 and £0.4m by January 31, 2010.

It said growth in revenue reflected contract wins from both new and existing customers, while the performance of its South African business continued to be strong, with more than £1.2m of new business won for the full year. This compares with £0.35m at the same stage last year.

During the second half of the year, the firm’s UK business also benefited from a significant contract signed with one of the world’s largest banks.  The order pipeline of XTAQ, acquired in March 2010 was also converted according to plan.

“Underlying demand continues to be driven by financial institutions seeking to improve efficiency, business processes and decision-making, and growing industry recognition of the value added by eg’s products to this effort,” said the firm.  

It said its pipeline of potential sales remained strong and it expected to benefit from recurring maintenance revenues and the sale of additional services and licences to new customers gained during the financial year ended January 31, 2011.

The company issues its full year results on March 23.

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