Brady Share Discussion Threads

[johnv] 16/9/2014 09:31

Octopus Investments added 500,000 shares. over 3% now.

[igoe104] 16/9/2014 08:03

Thanks gents.

I do like this bit............ The market is fragmented, leaving opportunities for cash rich Brady to profit from consolidation.

It plans to double revenue every three years, but it is not dependent on acquisitions to do this


'We have a licence backlog and our brand value is increasing globally

[techno20] 15/9/2014 22:10

We'll worth a read....

[...]

[rivaldo] 15/9/2014 14:24

Techinvest have just made their July issue available for free online - in it they made BRY one of their Best Buy picks for H2'14 as follows:

"Brady (BRY; 77p) was one of our Nap Tips for 2014 (at 73p) back in the January issue. So far, the shares have scarcely moved, though they did hit a high of 83.5p towards the end of March.

Most recent Update note was in the May issue which referenced the “continued strong progress” statement at the AGM, together with news of five new contract wins year-todate.

On June 10, it was announced that director Robert de Picciotto had acquired an
initial 212,500 position in the shares through the exercise of options at prices between 66.5p and 74p. A very encouraging signal."

[igoe104] 15/9/2014 13:05

Starting to creep up with buys now, hopefully its a indication that the over-hang is cleared.

[igoe104] 12/9/2014 13:07

Nice write up in the business weekly.

Lavelle said that on top of strong interims the delivery of increased projects in the first half of 2014 had given substantial improvement in profits and positioned the group well for the full year.

“For the second half, the group still has a significant revenue backlog of contracts that have been signed but the revenue not yet recognised, which, when added to the new sales in the first half, underpins the remainder of 2014 and beyond,” Lavelle said

[igoe104] 12/9/2014 13:03

Here`s the interim video, as riv says its looks very positive.

[johnv] 12/9/2014 12:29

They have reduced by only 62,000 yet 1.4m traded. Is that their late trade at no.13 I wonder?

[rivaldo] 12/9/2014 10:14

Hello - 1.4m shares traded, and all of a sudden buyers online are having to pay well over 78.5p and 78.9p to get stock for the first time in ages.

There are still 75,000 shares available to buy online, but perhaps we're on the verge of a move here.

EDIT - now 2.4m shares traded, and an RNS out saying HH have reduced slightly to below 10%. Hopefully just top-slicing.

[hastings] 12/9/2014 08:18

Cheers for the comment rivaldo and the above post.

[rivaldo] 12/9/2014 07:36

From this video I thought it was most interesting to hear the CEO say that 75% of BRY's revenues are visible even before the financial year starts:

http ://www.proactiveinvestors.co.uk/companies/news/72030/update-brady-plc-is-back-firing-on-all-cylinders-72030.html

We should also see H2 revenues benefit nicely from the now much weaker pound against the dollar, especially as BRY are now entering their busy season.

[rivaldo] 11/9/2014 07:40

A terrific write-up hastings, many thanks. Here's a direct link:



Some great excerpts, including:

“we anticipate a very active close to the year”.

"“We have our cost base firmly under control, with very strong recurring revenue and cash generation, along with organic growth and positive margins”.

"But with plenty of cash on the balance sheet and progressive dividends aside it was worth revisiting the subject of further acquisitions.

“Sure, we are absolutely always actively looking and it is something we would certainly consider” says the CEO."

[igoe104] 10/9/2014 18:21

cheers hastings that's a good write up.

Ps have to anything new on accumuli, another company that I feel has massive upside ?

[hastings] 10/9/2014 17:06

A bit late in being uploaded and I guess much has already been said, but may be of interest to others,also holding.

hxxp://www.cambridge-news.co.uk/business/private-punter

[rivaldo] 10/9/2014 09:46

There's obviously a seller out there, but judging by the price action plenty of buyers too, mopping up stock as it becomes available.

It's just a matter of time and clearing out the seller imo - could be today, could be next month - before BRY starts moving upwards. Especially when there's the promised news flow re new contracts.

Good to see Shareprophets opining that BRY offers decent value too:



In particular:

"“Brady is the largest Europe-based energy, commodity trading, risk management company and the fourth largest globally (c 5% market share)… The plan is to expand Brady’s global customer base and benefit from cross-selling opportunities in a $1.6bn global market growing at 5% pa (ComTech Advisory).

The sector benefits from a range of growth drivers, including customers underinvested in IT and regulation, compliance and risk-related factors.”

The shares have responded by nudging ahead to a current 78p, capitalising Brady at £63.5 million. With more than 50% of revenues recurring and the cash flow despite £3.7 million of R&D expenditure in the period, the shares look decent value.

Edison supports a “good value” conclusion by noting that “Triple Point was acquired by ION Investments, which is backed by TA Associates, a US-based private equity firm, for $900m, or 5x FY12 sales and 15x operating income. ION also acquired FFastFill, an AIM-quoted derivative trading software-as-a-service company, in February 2013, for c £98m or c 3.8x FY14 sales, 
c 26x operating profits and c 25x earnings”, though admits that “sector M&A has slowed since”."

[coppa1] 10/9/2014 08:42

Positive results but no great upward trend?
Maybe everyone has heard it all before....

[igoe104] 09/9/2014 16:05

Good write up here as well.


Brady has upside potential




By Lee Wild | Tue, 9th September 2014 - 12:09




Brady has upside potential

Brady (BRY) was busier than usual during the first half. Strip out currency fluctuations and revenue grew by 12%, earnings per share (EPS) more than doubled to a new record, and the sales team bagged 10 big licence deals, over a third of them outside of Europe. More contracts have been signed since, and the commodity trading and risk management software company is in better shape than for some time.

Factor in the strong pound - it wiped out £1.1 million of revenue in the first half - and Brady still generated 5% top-line growth to £15.6 million and a pre-tax profit of £1.5 million. Adjusted EPS of 2.49p was up 174% as the benefit of last year's new licence agreements began to feed through.

Brady's commodities division generated much of last year's success. Revenue there jumped 18% to £7.1 million and operating profit surged by half to £2.9 million. But at the energy division, which took much of the currency hit, revenue fell by 14% to £6 million, although a restructuring there found cost-savings of about £1 million.

But while the commodities unit made the big deals in 2013, this year it's the turn of the energy team. Of the 10 new deals signed during the six months, seven were energy contracts - two have already gone live.

That gives momentum for the second half, typical for the software sector. Two commodities contracts have been signed so far this quarter, and management told Interactive Investor to expect more by year-end - talks are underway.

Cenkos Securities expects full-year adjusted pre-tax profit of £5.1 million, giving adjusted EPS of 5.3p. Strip out forecast year-end net cash of £8.4 million, worth 10p per share, and Brady shares (77p) trade on just 12.6 times forward earnings.

"If investors begin to price certainty and growth back into the stock then we could potentially see a rapid re-rating in the shares back up towards 100p," says Cenkos. If current momentum continues, and if Brady avoids any hiccups, there seems little reason why they shouldn't.

[aishah] 09/9/2014 16:05

TechMarket View:

Brady picks up where it left off
Peter Roe, 08:11, 09 September 2014

Brady, the AIM-listed provider of trading, risk management and settlement solutions to the energy, recycling and commodities sectors, reported H1figures showing revenue up 5% to £15.6m (up 12% on constant currency terms). EBITDA margin rose to 19% (against 9%), EBITDA more than doubling to £3m.
Last year Brady’s financials lost momentum in the second half as big deals were signed but revenue could not be recognised until the software was installed and accepted. The first half just reported showed the benefit of this earlier activity, with £1.9m of revenue directly attributable to these deals.
Across the group there are good signs of progress. International revenue (and potential) increased with 10 additional contracts, including those with big Recyclers in the US and Canada and a first deal in the important Korean market, The portfolio is also being expanded through co-development with a major Norwegian Energy customer and the launch of EMIR regulatory reporting solutions for use across the Group’s European customers.
The underlying transition of Brady to new SOA platforms and shifting its clients to a service model is proceeding well. 3 of their c.30 clients were moved onto the go-forward platform in H1 and a further 6 or 7 will be migrated this year. This should generate further growth in recurring revenues (now at 50%, its H1 progress stalled by Krone weakness) and additional progress in profitability – the management is targeting EBITDA margins of 20-25%.
The management are confident of meeting market expectations of 10% revenue growth for the full year – to £33m, with EBITDA rising to over £6m, up more than 50%. After the full year results, reported here, we wrote that 2014 would reward our patience. We can be assured that the company is doing the right things to deliver.

[gargoyle2] 09/9/2014 14:47

Here's Lavelle:

[rivaldo] 09/9/2014 11:22

IMO Brady is good value on current year metrics and extremely cheap on forward metrics. And even cheaper on potential takeover valuations.

Edison's new note today reflects this. Note that "Triple Point was sold in 2013 for 5x sales". If BRY were to attract a similar price this would value them at around 212p per share:



"Brady reported a strong performance in H1, with organic revenue growth of 12% driven by the successful delivery of the large deals signed in late FY13, along with increased deal activity this year. Adjusted EBITDA (Edison basis) rose by 130% to £2.6m, helped by the cost cutting in H213, and the EBITDA margin rose to 16.9%. The group has a strong pipeline, with several deals at an advanced stage and anticipates a strong H2. Hence, in our view, the shares look good value on c 12x our cash-adjusted FY15 EPS if the group can maintain the deal-signing momentum."

"Valuation: Growth supported by strong balance sheet

Net of the £5.5m of adjusted net cash, the shares trade on 12.3x our FY15 EPS, 1.6x EV/sales and 8.9x EV/EBITDA. The valuation looks attractive relative to the peer group, and we note that all the other major ECTRM players have changed hands in recent years, eg Triple Point was sold in 2013 for 5x sales"

[puffintickler] 09/9/2014 11:09

If 2016 forecasts were a near certainty, then yes, these would be a bargain.

As it is the price quite reasonably reflects the uncertainties going forward in my view.

[igoe104] 09/9/2014 10:50

It has, however, introduced new estimates for 2016, predicting adjusted profit before tax - tipped to be £2.5mln this year - will have grown to £6.5mln by 2016

That will take it down to a very low p/e and a large cash pot, these are a bargain.

Eventually the cream will rise to the top.

[igoe104] 09/9/2014 10:44

Here another write-up.






Tuesday, 09 September 2014 09:29 Kate Sweeney
.

Brady powers ahead in global energy sector .




Brady CEO Gavin Lavelle
.
Cambridge software business Brady plc saw its UK share price nudge northwards in early trading after a strong sales performance in the first half of 2014.

Its risk management technology is gaining increasing global traction and the customer base is growing – notably in the energy sector – according to CEO Gavin Lavelle.

Lavelle told shareholders in announcing interim results to June 30 that Brady was signing and delivering larger licence agreements with some of the biggest names in the industry.

“Furthermore, the customer footprint continues to broaden, with a substantial amount of new business coming from outside of Europe. The group signed its first deal in Korea, which was managed entirely by the APAC team.”

The group is European leader in providing trading, risk management, settlement and logistics solutions to the global energy, metals, recycling and soft commodity markets.

Lavelle said that on top of strong interims the delivery of increased projects in the first half of 2014 had given substantial improvement in profits and positioned the group well for the full year.

“For the second half, the group still has a significant revenue backlog of contracts that have been signed but the revenue not yet recognised, which, when added to the new sales in the first half, underpins the remainder of 2014 and beyond,” Lavelle said.

He added: “The enthusiastic activity being demonstrated across all parts of the group, delivering both growth and healthy margins, gives me every confidence that we are on track to perform in line with full year expectations. Of particular note, the Energy business has had a substantial pick-up in activity and that will be reflected in the second half results.

“We are leaders in a number of important areas and continually look to extend this leadership. There is a substantial pipeline and I am looking forward to the second half with much enthusiasm.”

In view of the significant pressure from regulators globally, Brady has developed an EMIR regulatory reporting engine which has been successfully sold to four energy clients.

The solution has been developed so that it can be deployed across the Brady Group offerings or alongside other trading solutions. It is product-agnostic, can be easily extended to cover other regulatory reporting requirements and is built with Brady's latest SOA technology.

This technology allows clients to use the software at their offices or connect to it online as a Cloud service. Brady sees growing demand for Cloud services and has signed its first Energy Cloud client.

The group has also launched a new Hedge Management solution to provide hedging and risk management solutions for metals, recycling and agricultural commodities. This is also delivered as an online Cloud service, vastly reducing the costs associated with accessing these solutions.

Brady signed 10 significant new licence sales in the first half com,pared to six in the first half of 2013.

The Energy business unit signed seven deals in the period.

Group revenues were up five per cent to £15.6 million while Brady turned a first half loss of £0.1m in 2013 to a £1.5m pre-tax profit.

[rivaldo] 09/9/2014 10:40

I agree that BRY is a highly tempting takeover target for this sector.

BRY should see a slow climb imo as these results filter through to the market and attract coverage.

Here's the first - note that Panmure see £6.5m PBT for 2016, which just shows the rapid projected growth from this year's forecast £4.9m.

Here's the first results coverage (note the Panmure forecast for this year in the article is incorrect):

http ://www.proactiveinvestors.co.uk/companies/news/72030/update-brady-plc-puts-pedal-to-the-metal-72030.html

"UPDATE - Brady PLC puts pedal to the metal
By John Harrington
September 09 2014, 9:32am

After a couple of years on the ropes this business is now firing on all cylinders, reckons Panmure Gordon

---ADDS BROKER COMMENT AND UPDATES SHARE PRICE---

Brady (LON:BRY), which provides software solutions for commodity traders, powered back into the black in the first half of 2014.

Profit before tax was £1.5mln versus a loss in the same period of last year of £0.1mln.

Underlying earnings (EBITDA) soared 131% to £3.0mln from £1.3mln the year before, on the back of a 5% increase in revenue to £15.6mln from £14.9mln. On a constant currency basis the increase in revenues would have been 12%.

Speaking to Proactive Investors, chief executive officer Gavin Lavelle said he is confident the company can keep the momentum going.

"We've had 10 licence sales in the first half of 2014, as against six in the first half of last year, and these have yet to be reflected in the figures," he said.

Just over a third of the new licence sales originated outside of the group's European heartland, reflecting the increasing traction the company is achieving in North America and Asia.

No trading update from a software company seems complete without reference to the Cloud or the software-as-a-service (SaaS) business model, and Brady is already a long way down this path.

It sees growing demand for Cloud services and recently signed its first Cloud client from the Energy sector.

Although a transition from a licence-per-seat model to SaaS can initially dampen sales (because revenues are received monthly rather than in a lump sum upfront), the transition is generally regarded as being good for recurring revenues.

In Brady's case, recurring revenues now account for more than 50% of turnover.

The company is debt free, with cash of £6mln at the end of June, up from £5.7mln a year earlier, and pays a dividend; the interim dividend has been hiked to 1.70p from 1.60p.

City firm Panmure Gordon said the interims were as expected and that full-year revenue expectations look well-underpinned by revenue backlog that is yet to be recognised.

It calls the company "the pick of the fintech [finance technology] bunch when it comes to both trading momentum and valuation".

The broker is not making any major changes to its headline estimates, merely increasing the contribution from Recycling while reducing its profit expectations for Commodities and Energy to reflect the half-year split.

It has, however, introduced new estimates for 2016, predicting adjusted profit before tax - tipped to be £2.5mln this year - will have grown to £6.5mln by 2016.

"Last year’s licence deferrals highlighted that contract delays remain a risk to earnings despite 50% recurring revenues. However, after a couple of years on the ropes this business is now firing on all cylinders. The combination of market positioning, momentum and valuation is hard to ignore," the broker concluded, reiterating its 'buy' recommendation.

Shares were up 1.4% at 78.1p in mid-morning trading."