Belgravium

Data capture specialist Belgravium (BVM) has witnessed a steady recovery in demand for its products thanks to growing customer confidence. Over the last couple of years the Bradford based minnow has reduced its cost base and slashed the debt burden that arose from a past acquisition.

In the year to 31 December strong cash flow helped Belgravium trim net debt from £1.4m to £264,000 and the intention is that its outstanding term loan will be fully repaid by the end of the year. Sales held fairly flat at £8.2m, however, pre-tax profits nudged ahead by 7% to £432,000.

Belgravium tends to enjoy is strongest period in the final quarter and 2010 showed strong progress that has continued into the current year. Though originally set up as a hardware supplier Belgravium is increasingly shifting towards software and has focused on receiving cash up front for a number of contracts. Moreover it has teamed up with partners to deliver solutions such as chip & pin, RFID tagging and voice activated software. In the case of chip & pin by working with Europe leader Ingenico it allowed Belgravium to secure new contracts with Thomas Cook and Monarch.

Using its technology, clients can improve efficiency and deliver cost savings but the decision making process has been protracted. For example, a recent significant order worth 4m was signed with a large fuels multinational after many months of negotiation. Chairman John Kembery says 'we have worked hard to differentiate our product and are starting to become far more international'.

House broker WH Ireland estimates 2011 pre-tax profits of £600,000 and EPS of 0.5p, the following year a return to the dividend list is in prospect - albeit a 0.1p payment. Belgravium is on the lookout for complementary acquisitons and with the ship steadied the shares are worth holding on to.