Christmas Stock Picks: Portrait Software

My pick for 2010 is Portrait Software, restored and utterly reinvigorated by new chief executive Luke McKeever and winning an array of contracts thanks to its powerful technology and improved approach.

McKeever, who took over a year ago, inherited a fantastic software suite, the product of huge investment, and has instilled a professionalism into the group’s sales and marketing effort that is proving vital. Recent interim results to September confirmed Portrait’s return to profitability, with losses of £1.4 million converted into profits of £350,000 pre-tax.

Portrait’s marketing and customer service software ticks many boxes for large corporates in these straitened times, since it enables them to retain and ‘upsell’ existing clients without having to overhaul their systems.

The ability to deliver industry-leading returns on investment, such as saving Lloyds TSB ‘£10 million a year’ or reducing customer churn by 20 per cent at T-Mobile, is driving contract momentum. Moreover, a reseller partnership McKeever negotiated with Fiserv, the world’s largest financial services technology provider, has already yielded a landmark first deal with a major UK supermarket bank – every little helps, I suppose.

With sales growing and margins expanding, house broker Singer forecasts a £1.1 million profit and 0.9p of earnings for the year to March, rising to £2 million and 1.5p the year after. Reflecting the huge steps Portrait has taken since he joined, McKeever asserts that ‘it’s no step-change for us to achieve this growth, it’s purely execution.’