Software house Brady taking on staff as it sees new contracts ahead
Commodity trading software supplier Brady plc (BRY.L) said today that it was taking on extra staff to cope with consulting work associated with customers' installing of its flagship Trinity system.
The company said in a trading update to coincide with today's Annual General Meeting that the directors are "cautiously optimistic on achieving further contract signatures during 2006".
The news drove its shares up 8.3%, or 2p, to 26p, taking market capitalisation to £6.6m and providing some relief from a steady decline. For it most recent financial year to end December it reported a 50% fall in sales, as the roll out of its key product upgrade was delayed by changes to specifications sought by a major customer.
There has also been uncertainty around a major legal battle. The company said is no update in relation to the Sempra Metals Ltd claim and its counter claim. London-based trading and broking firm Sempra issued a claim against Brady in the High Court late last year for damages of £3.1m for alleged breaches of contract by Brady regarding a software development contract. Brady said earlier that a substantive defence was being prepared and that it intends to counter claim for fees payable under the software contract and damages in the order of £2.9m.
Clients invite proposals
But there has been some good news this year. On 1st March Brady said it had secured a new contract with one of the largest copper producers in the world. Since then, it said other large organisations have asked it to make detailed contract proposals and it is currently working on paid scoping exercises for a number of them.
Brady said a project to implement its Trinity software package is typically planned over several phases because of the large number of business areas that are covered by the product, including front office, risk management, back office, accounting, and supply chain logistics.
"Implementation of the product typically involves significant paid professional services work" it said, so it has begun limited recruitment to ensure it maintains adequate staffing levels for the expected level of business going forward.
The firm's accounting policy is to recognise licence fees predominantly towards the end of projects or phases, and therefore new contract signatures will typically have their largest positive financial impact 6 to 12 months after signature.
4th May 2006
