Global staffing software star Bond cheered investors with upbeat contract news over the festive period. The company offers investors good growth at an appealing valuation following recent share price weakness.

Led by chief executive Steve Russell and listed since 1997, Bond has announced a ‘multi-million pound order’ over a minimum of three years for its Adapt product with an as-yet unnamed ‘leading international recruitment company’. Further illumination is expected shortly, but the deal is thought to be a good one for well-established Bond, playing a leading role in the consolidation of a staffing software industry beginning to mature.

September saw Bond’s eEmpACT Software arm (boasting more than 1,000 customers across the US and Canada) acquire the staffing software division of California-based TraxStar, a deal cementing eEmpACT’s leading staffing and recruiting software industry position. This deal followed two early 2007 acquisitions, Gowi and Strictly Education, which broadened the Bond product range and helped the company deliver good interim results for the half to June. Sales increased 87% to £13.9m (organic growth was an encouraging 14%), with revenues on the rise in all geographic regions and highly visible recurring income of £6.2m representing 44% of sales. Pre-tax profits increased 17% to £1.9m.

Market forecasts for the 2007 calendar year point to profits progression from £4.3m to £6.6m, giving 15.7p of earnings and a 1.6p dividend. On those metrics, the strongly cash generative Bond, backed by Growth Company Investor at 97p in 2006, trades on a forward multiple of only 10.4. That’s far too low for a business with such a strong track record. Keep buying.

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