Brady

BUY

08/09/2011 Ben Jaglom

Software for commodities specialist Brady (BRY) has unveiled a 58.5% increase in profits as it benefited from continued volatility in the sector.

The AIM-quoted concern reported pre-tax profits of £548,000 (2010: £364,000) on sales that increased from £4.6m to £8.8m over the six months to June. Recurring revenue rose from £1.8m to £4.8m while the dividend grew from 1.3p to 1.4p a share. Earnings per share increased from 1.14p to 1.37p while cash stood at £10.4m (£3.3m.)

The company remarked that the period had included the 'successful integration' of Viz Risk Management, the Norwegian gas, coal and electricity specialist it acquired last December in a deal worth £9.6m. Brady noted that it had also signed its first 'soft commodity client' in North America, Asia and North Africa over the six months.

In an interview with Growth Company Investor, chief executive officer Gavin Lavelle said that Brady had benefited from 'strong spending in the IT sector', noting that the continued volatility in commodity prices had been 'very good' for the company.

Looking forward, Lavelle insisted that there was 'a lot of room for us to grow, both organically and via mergers and acquisitions', with 'lots' of opportunities for further acquisitions.

Analysts at paid-for research house Edison are forecasting pre-tax profits of £3.2m (EPS: 4.8p) on turnover of £18.8m for the year to December 2011. In 2012, profits of £3.8m (EPS: 5.4p) on sales of £20.5m are expected. A dividend of 1.5p is forecast for 2011.

Recommended by Growth Company Investor this April at 73p, Brady has produced a solid set of interims. With continued interest in commodities unlikely to decline at a time of considerable nerves over both equity and bond markets, Brady represents one of the stronger picks in the sector. Dividend-paying and with more than £10m in cash, the shares remain a buy.