Companies: KWL   

Global trade and the rising level of red tape facing shippers are fuelling growth at supply chain software and services venture Kewill. Steered by chief executive Paul Nichols, Kewill reported strong sales and underlying profits growth at the interim stage, with existing businesses and acquisitions driving 28% growth in sales to £24.4m, a 75% underlying profits improvement to £3.2m and a rise in recurring revenues to 50% of the top-line total.

Highlights included first full-half revenues from Kewill's recent Asian acquisition and 40% European revenue growth to £14.2m, although US sales growth in sterling was lacklustre at 3% on account of the negative translation effects of the depleted dollar.

Encouragingly, in a trend that is expected to continue, operating margins increased to 13.3% (9.7%), buoyed by the positive sales and margin effects of management’s ‘One Kewill’ integration initiative following a spate of acquisitions and business re-shaping over recent years. ‘We now have the products and the geographies that we wanted,’ explains Nichols, no longer ‘actively’ looking for deals having built a strong business with clients ranging from General Electric and Marks & Spencer to TNT, UPS and Pratt & Whitney.

‘Our markets are growing at between 8% and 12% per annum,’ says Nichols, with burgeoning volumes of international shipments, stricter legislative controls and the greater need for compliance playing into Kewill's hands. For the year to March 2008, investors should expect pre-tax profits of £6.8m (£5m) and earnings of 8.4p (7p) from sales of £51.8m (£41.6m), placing Kewill (originally backed by Growth Company Investor at 57p in 2003) on a modest forward p/e of 11.5. Add.

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Kewill	LSE	£39.82m	49.00p	-1.00p
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