Brady plc (BRY.L), the leading supplier of trading and risk management solutions for metals, recycling, energy and soft commodities, announced today reports on what has been a significant year both from a financial and operational perspective. With revenues and EBITDA up 47% and 52% respectively and a substantial increase in underlying profitability, this set of results is a further year of growth and gives the Group an impressive five year compound average growth rate of 38%.
Brady is leveraging its increased scale and executing more significant transactions with world class clients with average license deal value increasing by 77%. This, in addition to particularly strong new business deal flow, has led to a record year in winning new business with 20 significant new licence deals signed across our four business units and in all our sales territories. The progress through the year has meant that the Group’s customer base has doubled to 300 at the end of 2012 and the tangible benefits of scale and cross-selling have been clearly demonstrated by a number of cross-sell deals this year.
The Group’s transformational acquisitions in the year both enhances the Brady Energy offering and marks its entry into the recycling market, which is highly complementary to the Group’s existing business. The acquisition of Navita ensures that the Group is well placed to address demand in the global energy and commodity market place. Recycling is a very exciting market and the acquisition of SAI is a significant step for the Group. This acquisition completed Brady’s offering to the metals community and strengthened the Group’s position in the U.S.A. The SAI team successfully brought substantial new business to the Group in the first weeks following the acquisition and they continue to trade ahead of management’s expectations.
The Group’s employee numbers have increased to approximately 250 employees, with around half of the total working in technology, enabling the Group to leverage a wider pool of skills. The team has focused on two major initiatives in the year, being Cloud and a Service Oriented Architecture (“SOA”) programme. With regards to Cloud: The Group has continued to see a growth in demand for Brady to host its software solutions on clients’ behalf and sees this offering as a competitive advantage versus its competitors in securing new clients. Central to the Group’s development strategy is the SOA programme which aims to deliver ‘best of breed’ enterprise wide services. These services, which are built using the latest inter-operable technologies, allow re-use of components and modules across the Group. This can save duplicated time and build costs, provide greater business agility, reduce maintenance costs, facilitate platform and product consolidation and add value to clients by allowing features previously only available in one product to be also available in other products.
These markets in which Brady operates have continued to receive attention from investors worldwide partially because of the dramatic potential returns and price volatility. Approximately 40% of Brady’s clients are trading companies or brokers, who thrive on market volatility. The Group has successfully increased its market share in the ECTRM market. We believe we are now the largest native European ECTRM software provider, the fifth largest globally by revenue, the number one in metals globally, the largest in Europe for energy by number of client installs and the number one in recycling in the Americas. Although there are still concerns about the economic outlook for 2013, Brady is optimistic that the growth in the Group’s underlying markets will continue to be forced by powerful market drivers, which include:
• Cloud delivery of our solutions, giving faster deployment, less overhead and significantly lower cost-of-ownership to Brady’s clients;
• Focus on risk management and hedging, in particularly against market, counterparty, operational and liquidity risks. While political sensitivities mean that regulations are taking longer to deploy than originally anticipated, Brady still expects to see profound changes in the way that many markets trade as regulators respond to the credit crisis with more centralised clearing and increased regulatory requirements, for example from the Dodd-Frank law, MIFID and Basel 3; and
• The impact of EEGI, which is expected to increase cross-border energy trading, increase the proportion of energy generation from renewable sources, see the lower use of carbon intensive energy sources as well as increased traction in the roll-out of smart metering. These are all expected to generate higher volumes and more complexities in energy trading within European energy markets.
Looking to the coming year, with a much larger client base, stronger cross-product offering and wider geographic reach, the Group is well placed to deliver further momentum in growth during 2013 and beyond.
Gavin Lavelle, CEO of Brady plc, commented:
“The Group has had a very busy year, with notably strong new business deal flow. Brady is leveraging its increased scale and executing more significant transactions with world class clients. The year has also been an important one for Brady, with the completion of transformational acquisitions to enhance the Brady Energy offering and to enter the recycling market, which we see as highly complementary to the Group’s existing business. We were delighted with shareholder support for the £18 million share placing in March 2012.
I look forward to reporting further positive progress in the coming months.”
The full release is available at: www.bradyplc.com.
