Companies: BVM   

Data capture group Belgravium Technologies is contemplating buying a larger company after lifting interim profits 23 per cent to £484,000.

AIM-quoted Belgravium, which specialises in real-time data capture systems for wholesalers' warehouse control and inventory management, is understood to be well advanced in consideration of a potential target company with larger sales and links to new markets, including Australia. Belgravium pushed sales up 23 per cent to £2.3 million in the six months to June and house broker Teather & Greenwood expects the company to make £1.1 million pre-tax for the full year, against a somewhat depressed £751,000 for all of 2004.

A notable fillip in the first half year came with a £750,000 order for 450 of Birmingham-based Belgravium's 'Atlanta' proof-of-delivery systems from home retailer Grattan. With cash up from a year-end £2.2 million to almost £2.5 million, chief executive John Kembery says the company is holding the interim dividend to 0.13p but suggests the year-end payout could be increased from last year's 0.45p final dividend.

He stresses that Belgravium, which spends upwards of £500,000 a year on research and development and often attaches a profitable five-year maintenance agreement to product sales, is pursuing innovation and expansion opportunities at home and abroad, especially in continental Europe. Radio frequency identification, which involves tagging products, is as yet a slow burner because the tags are costly for low-ticket items, but, if that changes, the company will be ready.

Kembery claims that most of Belgravium's competitors are divisions of huge American corporations, without the incentive or ready adaptability to cash in fast on latest market developments. With the shares at 15p, up 1p today, valuing the company at £10 million, the rating will benefit if the acquisition deal pleases.