eg Solutions PLC (LON:EGS) saw its full-year underlying profits jump by over 50% driven by record revenues in the second-half thanks to multiple new contract wins across many sectors and territories.
The back-office workforce optimisation company reported adjusted underlying earnings (EBITDA) of £1.2mln for the year ended 31 January 2017, up 52% on the £0.8m reported a year earlier.
Full-year revenues rose by 8% to £8.2mln, up from £7.6mln in 2016, boosted by a leap in second-half revenues to £5.7mln, versus £2.5mln in the first-half.
The adjusted numbers were stated before charging share based payments of £22,000, down from £98,000 in 2016, and non-recurring charges, including board restructuring costs, of £263,000.
eg said it has a strong contracted forward order book with recurring revenues of £18.55mln, up from £17.40mln in 2016.
The firm pointed out that its International Direct and Partner business now accounts for 37% of revenues, up from 24% in 2016, with three new partners signed giving a revenue stream of £1.45mln, 18% of total revenues, ahead from £0.34m or 4% in 2016.
Real momentum …
Elizabeth Gooch, eg Solutions’ CEO said: “I am delighted with the performance of the business, particularly in the second half of the year.“
She added: “Our realigned strategy of focusing on sales and distribution channels is paying great dividends. We have over the past few months delivered multiple new contract wins, expanded our international business, increased our partner distribution channel and achieved sales of our new mobile platform.”
Gooch concluded: “There is real momentum within the business and I look forward to the new financial year with confidence."
In mid-February, eg Solutions revealed it had won a new contract worth £692,000.to supply its eg operational intelligence software to a public sector organisation.
The contract was the first to be won under a new partnership agreement with the provider of eg’s managed cloud service platform, CGI.
Potential for re-rating ...
In early afternoon trading, eg shares were 1.6%, or 1.0p higher at 63.5p.
In a note to clients, analysts at house’ broker N+1 Singer said: “This was an excellent outturn after a poor first half and attributable to an increased focus on sales and distribution in the second half.
“Revenue visibility is also improving, with repeat and recurring revenues now £4.6m (56% of total) and the contracted forward order book increasing 7% to £18.5m.”
They added: “ A reinvigorated employee base, broadened routes to markets and increasing geographic/vertical market penetration give us great confidence in the outlook.
“Consistent delivery is now required to promote what could be a potentially significant re-rating.”
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