Outlook: Strong earnings growth
Brady reported record FY14 profitability, with adjusted EBITDA up 79%, as revenue grew 13% at constant currencies. Cash generation was strong (the £9.6m cash pile equates to 12p per share) and the dividend was lifted by a higher-than-expected 9%. The strong numbers demonstrate the resilience of the business to volatile commodities. While falling commodities prices hurt producers, they are beneficial to traders and manufacturers who also purchase the group’s software. Activity remains busy with the group close to signing another substantial deal, and hence we believe the stock continues to look attractive at c 16x our FY16e earnings.Brady is engaged in the provision of integrated trading, process and risk management software solutions for global commodity, recycling and energy trading companies.
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