Leisure sector software supplier Gladstone continues to make sound progress, transforming a £1.7m loss into a £183,583 profit before tax during the year to August. The group's first full year profit was achieved in spite of an 8% revenue reduction to £7.9m attributed by chief executive Ben Merrett to reduced sales of low-margin hardware sales. The company's plan to switch clients away from outright software purchasing and towards a leasing model (reducing up front turnover but increasing stability) also appears to have paid off with rental revenues now accounting for 37% of all revenue. Another significant factor in Gladstone's revival has been a reduction in directors' pay. During the year to August 2001 the company's board took home a staggering £1.04m, but this year the total was slashed to £195,084. The big worry for the future, however, is that, while the public continues to flock to health and leisure clubs, the rate of new club openings has halved over the past five years. Merrett reckons 'consolidation amongst UK operators [is] inevitable' and suggests that this could boost Gladstone's prospects as software systems 'have often been reviewed when ownership changes'. It remains to be seen whether or not he will be proven right but given the progress Gladstone has made under Merrett and a current market value of £5.1m, the shares are worth hanging on to.

Gladstone	AIM	£11.91m	24.50p	0.00p
Click here for interactive charting
Other company articles:
Gladstone			02/05/2008
Gladstone			16/01/2008
Gladstone			24/12/2003
Gladstone			23/12/2002
Gladstone			26/04/2002