reports
- Richard Williamson
Brady - Recommended cash offer at 10p
Brady has received a recommended all-cash offer at 10p per share (a 50.8% premium to the closing price), valuing the issued share capital at £8.3m, from Hanover Active Equity Fund II, a private equity (PE) investor focused on SMEs in the UK and Nordic markets. The cash offer has been declared final, will be declared unconditional as to acceptances based on 50% of the share capital and may only be increased if there is a counter-offer.  Before the bid, Brady had been looking to secure addition...
- Richard Williamson
Brady - Suspension of estimates
For the purposes of the Takeover Code, Edison Investment Research is deemed to be connected with Brady plc. Under Rule 20.1 Edison must not include any profit forecast, quantified financial benefits statement, asset valuation or estimate of other figures key to the offer, except to the extent that such forecasts, statements, valuations or estimates have been published prior to the offer period (as defined in the Takeover Code) by an offeror or the offeree company (as appropriate) in accordance w...
- Richard Williamson
Brady - New strategic plan, new sales expected FY20
Following its August trading update highlighting a slowdown in new sales, Brady’s interim results were in line with our expectations. H119 revenue was £9.5m, a 9% fall vs H118, with an EBITDA loss of £1.8m and a PBT loss of £2.5m. Net cash fell to £1.0m from £4.6m at FY18. Recurring revenues represented 82% of total revenues. The new CEO has completed her strategic review and management is focused on delivering a more scalable, predictable and sustainable business to allow the company to ...
- Richard Williamson
Brady - Perfect storm as sales stall forecasts revised
With the company expecting FY19 revenues of c £19m, c 22% down on our previous forecasts (£24.3m), new sales have slowed markedly since Brady’s last trading update on 30 May. This represents a perfect storm for Brady with it trying to affect a turnaround in the face of significant market and business uncertainties. We have revised our FY19 forecasts and now anticipate a PBT loss of £4.2m in FY19 (previously £1.0m) with FY19 net cash falling from £2.7m to £1.2m net debt. We have withdrawn...
Brady - Sales pipeline is building
In a brief in-line trading update, Brady has said it has made substantial progress in the first four months of FY19 and the sales pipeline is building. We are maintaining our forecasts. Carmen Carey took on the CEO role in February and we expect the results of her review of the business and new strategy to be outlined with the interims in September. The market opportunity is substantial and we believe Brady is well positioned to benefit from the significant sector consolidation.
Brady - Building the business for a brighter future
The last two years have seen a significant streamlining of the cost base and a focus on delivering on several significant legacy contracts, which will be completed in FY19. There has also been significant investment in product in FY18 (R&D was 30% of sales). Carmen Carey took on the CEO role in February and management is now looking to exploit the benefits of the streamlining and investment, with an increasing emphasis on new sales. The market opportunity is substantial and we believe Brady is w...
Brady - Broadly in line as new CEO starts in mid-February
FY18 numbers were broadly in line with expectations and we have maintained our forecasts. Management remains confident on the outlook as the group stands to benefit from the streamlining and investment of the last few years. In December, Brady appointed Carmen Carey, currently a Brady non-executive director, as its new CEO. An initial priority for the new CEO will be developing the new sales strategy. The market opportunity is substantial, and we believe Brady is well positioned to benefit from ...
Brady - Positioning for new technologies
Brady has undergone a significant transition into a leaner, more focused business. Costs have been taken out and the recycling business sold earlier this year as it did not fit well with the business. The main priorities are delivering on legacy contracts while significant resources are being used to refresh the product, with c 25% of FY18 sales expected to be spent on R&D. Consequently near-term ratings remain elevated. However, the market opportunity is substantial and we believe Brady is well...
Brady - In-line trading, focused on investing in technology
In a brief AGM update, Brady said that trading has been in line. Following a period of significant change, with new people hired and the business having been streamlined, the primary focus has shifted to re-engineering the software. The initial outcome of this was shown with the launch of the group’s first FAST START implementation offering in May. We will review our forecasts following tomorrow’s capital markets day. If Brady can successfully transition to the cloud, there is a lot to go fo...
Brady - Restructuring complete, transformation continues
Brady has completed the reorganisation that followed the 2016 business review. The focus now is on the re-architecture of its products, and the cash boost from the Recycling disposal will help to that effect. The group spent 33% of sales on R&D in FY17, largely to catch up on client obligations, and continued high investment is anticipated as Brady expands its portfolio of microservices. If Brady can successfully transition to the cloud, there is a lot to go for as E/CTRM is an attractive growth...
Brady - Disposal simplifies the group structure
Brady is selling its US-based recycling business for an initial c £3.3m with c £1m balance in 18 months. The disposal will simplify the group, boost cash resources towards £8m and enable management to focus on its core physical trading commodity and energy businesses. Additionally, the company has said that FY17 revenues will be c £2m lower than consensus at £27m due to a faster-than-anticipated switch to the recurring revenue model and two projects slipping into H118. We have cut our FY18 ...
- Transition to rental and microservices is on track
Brady’s H1 results reveal the initial impact of the group’s transformation. While revenues slipped, reflecting the planned shift to software rental, recurring revenue rose to 68% of total revenues, up from 60% a year earlier. The move into microservices is gaining traction, with three proof of concept trials taking place in H2. Four new licences were sold in H1, all on a rental format, of which three are hosted. With nearly four months remaining in FY17, the group has 93% of revenue in the bag, ...
Transitioning continues
We have revised our forecasts following the newsflow over the last few months. While management has completed its strategic review, the transitioning process is continuing. The group has switched from operating on a divisional basis to global functions. The development team has been unified, and development work has shifted from platforms to ‘microservices’, so that new products can be leveraged across the group. Further, Brady is evolving to a recurring revenue model. We have cut our FY17 forec...
In line, focus has been on customer success
In a brief trading update, Brady says that trading is in line with market expectations. FY16 saw of a lot of internal change, with a new chairman and COO while the CEO left the group. While commodity markets have seen some improvements, the backdrop remains challenging. The main focus over the last few months has been on improving efficiencies, including a shift away from the old divisions to global functions. We make no major changes to our forecasts and, given the strong balance sheet and scop...
In line, focus has been on customer success
In a brief trading update, Brady says that trading is in line with market expectations. FY16 saw of a lot of internal change, with a new chairman and COO while the CEO left the group. While commodity markets have seen some improvements, the backdrop remains challenging. The main focus over the last few months has been on improving efficiencies, including a shift away from the old divisions to global functions. We make no major changes to our forecasts and, given the strong balance sheet and scop...
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Update: Acquisitions return business to growth
In another in-line trading update, Brady has reported that H1 revenues grew by 4%, which includes the impact from acquisitions (energycredit and ScrapRunner) and currency movements. New business was spread across the three divisions, with nine new contracts signed. The trading update reveals that the group is continuing to stabilise in spite of a tough commodities-related backdrop. The outcome for the year will depend on the busy Q4. We are maintaining our forecasts and continue to believe the s...
Update: Steady as she goes
In an in-line trading update, Brady says each of the group’s three divisions have signed deals in the year to date. This includes the first new business from energycredit, which the group acquired in January. The brief trading update indicates that the group is stabilising after the difficult FY15, which saw business being deferred in the wake of the turmoil in the commodities space. Nevertheless, the outcome for the year will depend on the busier Q2 and Q4. We are maintaining our forecasts an...
Outlook: Investment case remains sound
Brady had a difficult FY15, as turmoil in the commodities space resulted in business being deferred. Nevertheless, the commodities markets are showing signs of recovery and the commodities software sector benefits from broader business drivers such as regulatory changes while the sector remains underinvested in IT. Further, the group continues to use its position as a quoted company to consolidate the sector and in our view the acquisition of energycredit is a bold one, as it creates significant...
Update: FY15 profits in line, cash comfortably ahead
FY15 trading was in line with expectations, which were revised downwards in late November due to lengthening sales cycles, relating to the deteriorating market conditions in the commodity sector. The group retains a strong balance sheet with year-end cash comfortably ahead of expectations at £6.5m (we forecast £5.0m). The shares have made a partial recovery in recent weeks on the back of four licence wins and an interesting small acquisition. The licence wins show Brady can still win new busin...
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