Document management software supplier Invu has grown at an impressive rate since listing on AIM in early 2004. In fact, April’s full year results were characterised by significant strides forward in almost every respect. Sales surged 52 per cent to £4.8 million, profits doubled to £1.3 million and earnings increased from 0.64p a share to 1.25p.

Moreover, this strong financial performance reflected significant improvements at the operational level. Over 38,000 individuals (working for more than 2,000 businesses) now use the company’s products. ‘We’re picking around 60 new customer sites a month at the moment,’ says founder and chief executive David Morgan. This compares to the average of 40 new sites a month achieved last year.

With recurring revenues also closing in on £1 million, Invu appears well set to achieve further significant growth and its success can be attributed to the simplicity of its product and the strength of the sales channel it has developed.

The group’s software addresses an obvious area of pain for many small and medium sized businesses by allowing them to easily archive, search and retrieve documents electronically. The benefits are clear. First the software means clients no longer have to retain a paper copy of every document that is important to them. Perhaps even more importantly, it reduces the likelihood of vital information being misplaced or destroyed.
Once a document has been scanned, it is then indexed and can be retrieved as and when required. Users can search for all documents relevant to a certain subject too.

As for the reseller channel, this appears to have played a vital role in the group’s success so far. Last year 22 new resellers were recruited and 35 were abandoned, affording the group a list of 125 in total. ‘We have looked to consolidate our position by accrediting new and better resellers, while at the same time discontinuing accreditation for a small number of less productive resellers,’ Morgan points out. ‘The reduction has improved quality. We’ve always preached to our resellers that document management itself is boring, so they have to focus on the fact that our solutions can save a lot of pain for SMEs.’

Historically, Invu’s emphasis has been on the UK market yet Morgan and his team retain grander ambitions. Holland is the first target and several resellers, including Panasonic, have been appointed here. Morgan admits that it is still relatively early days in this market, but he notes that the second half of last year showed some promise and opines that ‘we have high expectations this year. From our point of view Holland is a good market as businesses there readily take English-speaking software.’

With a new multi-lingual version of Invu’s software set for launch, attentions are also turning further east and recent weeks have seen the group appoint its first resellers in Asia. From here Invu hopes to open up revenue streams in Singapore, Indonesia, Malaysia, Brunei and Thailand.

On the financial front, Invu is anticipated to continue its strong upward trajectory. Broker Dawnay Day Townsley predicts sales of £6.4 million and profits of £2.1 million for the current year, with these figures rising to £8.3 million and £3 million respectively 12 months on. Given the levels of growth achieved thus far and these predictions for the future, the current £28 million market valuation does not seem too excessive and although a prospective p/e of 18.3 is not the cheapest the potential is clear.