Brady reports dip in income as it moves to recurring revenue streams

Trading and risk management software company Brady reported a year-on-year decrease in revenues over the six months leading to 30 June but reiterated its guidance for the full-year all the same.

Overall revenues dropped 11% compared to the previous year to £13.1m, but the London based firm did grow its recurring revenue streams, by a touch over 1%, which it had previously outlined as one of its main goals for the year, to £9m so that it accounted for 68% of its total sales in the half.

Brady's one-off licence revenue decreased to £900,000 from the £1.5m it had posted a year earlier as a result of the pivot towards "predictable recurring revenue", which would contribute to an even larger difference than usual split in sales between the two halves of the year - because of seasonality - but that once this transition year was complete the split would be more evenly weighted between both halves.

Service fees also fell 29% to £3.2m.

The firm cited challenging market conditions in the energy and commodity trading sectors in the first half, as well as the drop in revenue, as the reason for its EBITDA falling from a £2m in 2016 to £900,000 pound loss twelve months later.

Brady also posted a pre-tax loss increase, from £100,000 to £3.5m, and a drop in cash balances of 24% to £5m.

The company noted that it would have made approximately £1m more during the period on its former one-off licence model, but with the implementation of the recurring revenue model it will receive £3.2m over the life of four new contracts and would benefit from a series of contract payments over a number of years from these deals.

Brady said that as of 7 September it had accounted for 93% of its full-year revenue target, from both new and existing contracts, with just 7% left to achieve for the remainder of its trading year.

Executive chairman, Ian Jenks said, "With a high visibility of over 93% of our full year revenue and control of our cost base we continue to expect full year results to be in line with market expectations."

As of 1350 BST, shares had dropped of 2.90% to 67.00p.