Kewill provides software and services that manage business-to-business supply chains. The group, which has made five acquisitions over the last three years, innovates in the area of supply chain execution software focused on transportation management and trade logistics, and clients range from UPS and Marks & Spencer to Pratt & Whitney.

Chief executive Paul Nichols reported a 79% profits surge for the half to September, as all divisions returned to growth. On sales up 39% to £19.1m, pre-tax profits jumped to £2.1m (£1.4m) and earnings soared 44% higher to 2.6p.

Despite the uncertain macro economic environment across the pond, US businesses saw rising sales and orders, and in Europe, acquisitions boosted coverage of the growing international trade management market. Nichols flagged up higher margins and ‘excellent profits’ at the order management and visibility business, which enjoyed strong pick-up in the insurance sector and a return to software spend by certain retail clients. A key new contract highlight was the recent multi-million dollar deal with Purolator, the parcel arm of Canada Post, for the enterprise shipping leg of the business.

Nichols now sees lucrative cross selling opportunities under the ‘One Kewill’ banner, and argues that global trends for rising regulation and compliance in shipping and trade underpin growth prospects. Kewill closed the half with healthy cash balances of £9.3m, even after acquisition payments, and plans to reinstate dividends at the year-end. Analysts expect profits of £5m from a top line £42.1m, and 6.4p of earnings.

We think the shares, recommended by Growth Company Investor at 57p in 2003, are worthy of further consideration on a modest forward p/e of 12.3. Add.

Kewill	LSE	£40.63m	50.00p	0.00p
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