Portrait Software

The ability of software designer Portrait to help companies retain their customers is winning ever more friends and strengthening existing relationships too.
 
‘Up-selling and customer services are areas in extreme growth, as is usual in a recession,’ says chief executive Luke McKeever. ‘With recent wins like Merrill Lynch, Lloyds and Dell we are able to demonstrate better results on less marketing spend.’
 
McKeever, who has brought a renewed commercial focus since his appointment seven months ago, has overseen a slight increase in revenues from £14.1m to £14.4m in the year to March despite a historic weighting towards the beleaguered banking sector that meant a whole quarter of the year was ‘virtually lost’. Over £2m of exceptional restructuring costs dragged the bottom line to a pre-tax loss of £3.1m.
 
But, as well as an increasing value and number of deals won outside the banking sector, including in insurance and telecoms, other positive trends were noticeable between the two halves of the year, with license sales up 75% and a return to operating profitability in the second half. A strategic partnership with Fiserv, the world's largest financial services technology provider, yielded £1.3m.
 
Of this relationship, whereby Portrait’s comprehensive ‘Platform’ technology is integrated with Fiserv’s to create a sales-and-service product for banks, McKeever says ‘this year we expect considerable growth’. Fiserv has guaranteed royalties of £1.8m and has also agreed to re-sell Portrait’s marketing software as well.
 
Other than with Fiserv, McKeever’s plan is not to ‘chase’ sales of this pricey Platform product on its own and instead concentrate on smaller ‘incremental’ applications. Furthermore, costs have been ‘rationalised’ and around £10m of annual recurring revenues provide a good basis for the new financial year, with 12 deals already sealed.
 
The shares, backed here at 18.5p in 2007, have been as low as 3.5p since and, with the company presenting the right message for these straitened times, should continue to rise. We are buyers again.