Brady Share Discussion Threads

[stegrego] 24/1/2013 21:31

Edison have reduced forecasts slightly today.

[brokertobroker] 23/1/2013 20:55

You're certainly well informed on BRY, Woody. What are two (other) of your top picks for 2013? Cheers

[woodcutter] 23/1/2013 14:34

Well fwiw my findings on license verses rental are below:

License
Client get the software on his platform but pays upfront lump sum for the licenses as BtoB intimated. Although i suspect these cost are spread a little.
Clients get greater control as the software is on his platform and in fast moving market he can upgrde his hardware to improve performance. But as software develops he has to keep upgrading hardware.
Client has to pay for that hardware which could be expensive.
Client has to cover the cost of service agreement too. Messy for upgrades as any patches have to worked across the platform.
Potential license compliance problems, unauthorised copies of software
floating around.

I guess the client feels he has more control of the product.

Rental.
Client pays on a monthly basis so vendor sees smoother revenue stream.
Client doesn't need to spend on hardware but must be assured of continuity of processing speed, particularly in fast moving markets.
No compatability problems as software is upgraded as it's all in the hands of the vendor.
Client concerns over downtime though if there's a system failure outside his control.
Maintenance support etc removed as it's not necessary and included in the rental cost.
Compliance problems removed as the vendor controls the software.
Client might be concerned on data security issues.
Difficulty in integrating with existing client software particularly from remotely hosted software.

Client has less control over the product.

I guess there's probably more to consider on top of this but it gives a flavour of the difficulties. Personally i really don't have a view which type of operation they sell as long as the share price rises.

One thing it might explain though is why the orders all tend to come in lumps, particularly towards the end of the year as this may well be when companies budgets are coming to a close and they want to get the order placed before their year end. Just an assumption.

Woody

[brokertobroker] 23/1/2013 13:58

Top posts all, keep up the good research!

So EPS and revenue forecast have been downgraded a tiny amount – but cash flow in Q4 was very strong with net cash was £7.9m – c£1.5m ahead of Cenkos forecasts.

Clients are a little reluctant to move to the rental, because the total bill of a 5yr rental (monthly) contract is actually more than just signing a c.250k contract. A balance between stomaching a one lump sum or choosing monthly payments, IMHO. It will take time, but I don't believe the management will sacrifice a deal by only offering rental. As you allude to Woody, the city loves the steady revenue visibility that the rental model offers.

Agree that 2013 will be key, but all signs indicate positive continued momentum. I'm sure that expansion into the Americas market will be a key challenge for management given the strength of Openlink and Triplepoint. easy to do if you read what Brady's clients say about the software (see website).

Overall, BRY is massively undervalued compared with similar quoted companies (US). 2013 PE of 14 is pretty cheap considering the quality!

It's an screaming BUY for me.

[woodcutter] 23/1/2013 13:51

You need to be patient, this next year could be the defining year for BRY. With the acquisitions bedded in and it's position in the market confirmed then the orders will flow and the cash position should be well enhanced.

Woody

[jakleeds] 23/1/2013 13:51

A good update, well-received by the market.

I suspect more contract news won't be far away.

Should see new highs in the share price soon enough.

[jamielein] 23/1/2013 10:13

I bought some this morning but I think I'm having buyer's remorse. Some more contracts would help with that.

[apad] 23/1/2013 09:45

My inner chimp is frettting about the uncertainties, he will only be calmed by news of contracts.
apad

[woodcutter] 23/1/2013 09:17

EBITDA pretty much in line with my forecast ref post 787. I recall BtoB thinking this a little low but it has been a year of transition with all the acquisitions so i expected that to impact as it takes time to bed them down.

I'm a little disappointed in the cash position as it's only just above that at the end of H1, possibly a lot tied up in receivables due to the number of contracts won later in the year. This has to improve significantly over the next year imo.

Expected eps to be at the top end too around 6p as GHF noted.

This next year is make or break and as GHF also noted we need to see a significant uplift in eps forecast given that the acquisitions should have been well integrated by then.

One point worth noting from the rns is the continued drive to get clients to move from a license to rental contract, i assume SaaS. They have been pushing this for some considerable time now and it appears to me that the clients are a little reluctant to move in this direction, so why continue, what are the advantages, the clients don't seem keen on it that's for sure. I can see how it might smooth out revenue streams but would be interest to understand more about the pro's/con's perhaps someone could enlighten me.

Woody

post note

Done some research on license verses SaaS rental and can understan why the vendor would push for rental and also why the client might see license as a better alternative.

[cheshire man] 23/1/2013 08:03

This is going to be a good year for BRY IMO :-)very pleased with this news !

[glasshalfull] 23/1/2013 07:59

Strong update with it appearing that SIA an excellent acquisition...as we mooted. Cash strong, especially in light of the SIA purchase.

EPS came in a bit lighter than I was expecting...Edison had 6.0p forecast & Cenkos 5.65p & they've come in with approx. 5.7p

They are undoubtedly a quality outfit & I'll be interested to see forecasts in light of this as Cenkos only have 6.3p factored in for the current year...& I'd be expecting more for valuation assigned to the company.

Regards,
GHF

[cfro] 23/1/2013 07:49

Very solid update.

[brokertobroker] 23/1/2013 07:40

Initial thought: shame revenue wasn't higher and i suppose the uptake on recurring is to be expected, but GREAT update, very positive indeed. BRY is in for a great 2013.

300 clients now, so more cross selling of products will follow!

Well done BRYAN

[bookbroker] 23/1/2013 07:40

As expected, not likely to move the stock price, already fully valued, remember we're at the top of the cycle!

[nfs] 23/1/2013 07:15

So historic pe of about 15 ex cash,with strong market position and pipeline.all very nice

[togglebrush] 23/1/2013 07:10

RNS extracts
...
Trading Statement for Full Year 2012
...
The Group expects to report EBITDA excluding exceptional costs of approximately GBP5.2 million, 40% ahead of 2011. Adjusted EPS1 are expected to be approximately 5.7p, in line with market expectations. Revenue growth in 2012 was approximately 47%, supported by the acquisitions of Navita, syseca and SAI in 2012.
...
The Group continues to enjoy a strong financial position with cash at 31 December of GBP7.9 million, equivalent to 10 pence per share. The Group has no debt.

Gavin Lavelle, CEO, commented: "I am pleased to show continued growth in new business wins despite the severe macroeconomic headwinds. Brady continues to execute on its plan of leadership in selected markets combined with strategic acquisitions to augment its client base, solution portfolio, geographic reach and domain knowledge.
...
Full details of the Group's financial performance together with an outlook for 2013 will be provided in the preliminary results, which are expected to be announced on 11 March 2013.

[woodcutter] 21/1/2013 16:32

APAD

The only way you're going to get to know the way they put their packages together is to witness a bid i'm afraid and then you'll also see how the competition puts their bid together.

My experience of running engineering businesses and the way that type of software is developed for operating process and mechanical plant is to build it in modules so that it is reusable from contract to contract. Many projects have very similar features so this is possible. I would be amazed if BRY aren't doing this.

You capitalise the intial software development then only write off the installation and link up costs to other systems for each project. As time goes moves on you reuse the modules for all the new projects you win but still charge for them or at least some nominal value. As you can see as sales increase, the development costs decline and cash flows in. I think i posted this previously but never mind.

The other really good thing about this approach is that you can deliver in much shorter time frames as most of the software is already written. This can be a big advantage with the potential clients.

The other key area is the user interface. This MUST be very friendly and easy to understand and again the only way you get to see it is to witness it first hand. Perhaps we could arrange an open day and let them present to us;-)

One thing on user interface that is appealing is the changes to the website are much more comforting, the old web site was too techy and not touchy feely, sales simple, as it is now.

As long as they keep winning contracts then i'm happy.

Woody

[woodcutter] 21/1/2013 16:12

Thx GHF

Always a bit subjective with software cos and i've been conned before so lets hope it's good news this week.

I wouldn't be buying this if was a run of the mill company in a competetive market. It's only the market leadership and lack of competition that made me invest here, but they must start generating cash.

Sorry to hear about email....what a mess. I get tons of junk mail in my personal hotmail account. Man Flu almost over too, might even see the golf course this week, melting snow permiting.

Read Greenblatt "the little book that beats the market" and Malcolm Pryor "The financial spread betting handbook" over Xmas. Both interesting reads. I'll send you some of the salient points when i've got a minute..

Definately going to have a dabble at SB. Might make a trader out of me yet. Not sure mrs WC will like that though. :0)

Will try and find some time to look at THAL this week. Have a few small home projects i must get completed to stay on the right side of Mrs woodcutter.

Woody

[apad] 19/1/2013 07:38

What I don't know about BRY is why/if they can compete with OpenLink and Triple Point. What are they offering that distinguishes from these companies, that win the EnergyRisk software rankings pretty much hands down. They are also hiring in numbers whereas BRY has 3 vacancies in Switzerland.
Does their software have an advantage in some way?
Any ideas?
apad

[glasshalfull] 18/1/2013 13:13

Preoccupied with spam issue this morning to post.

Courtesy to say that I contacted Brady this morning & told t/s now next week. Haven't a clue what this means...guessing that with recent acquisition activity that it's taking longer to reconcile internal accounts?

Answers on a postcard.

woody - Appreciate your posts on the thread. First class!

[masurenguy] 17/1/2013 11:40

I guess that we should now expect to see a trading statement tomorrow.

[foxman14] 15/1/2013 12:31

Looks to me like the MM's have bought the sellers remaining shares at 93.81p. On the basis of a positive trading statement sometime during the next few days they will move the price up and offload them for a nice profit. Lets hope thats how it works out!

[apad] 14/1/2013 17:16

Love this:

https://docs.google.com/viewer?a=v&q=cache:u9em7LkYji8J:www.cl.cam.ac.uk/teaching/0708/SWEng/sweng1b-brady-2007.pdf+%22robert+brady%22+software&hl=en&pid=bl&srcid=ADGEESgw6Cx_WLnr6vKFNfXrXje6IdaJ4M47vFboODmEepvNmWDy1YVwIDzNlats34z6IRhfvr1nypL75-HfqmXEqwIAGhoicvSNqg90tXsMoG-3VAG5EVe8ze4dxhH1ZdcL5xsEbmJ-&sig=AHIEtbRW9dfh4RBrmBqckygtrsm0odpIMA