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UK – Staffing software market “challenging” for Bond International

25 September 2012

Bond International Software Plc (BDI:LSE) has seen challenging trading conditions in the UK and North America while contract wins in Australia and Japan have lifted first-half revenue in the Asia Pacific region, the company reported on Tuesday.

“Trading has improved since the half-year end and the recent opening of an office in Singapore demonstrates our confidence in the Asia Pacific region and its prospects for growth. The HR and payroll division continues to produce high returns and the outsourcing division continues to grow at a satisfying rate,” said Chairman Martin Baldwin.

But the firm, a specialist provider of software for the international recruitment and human resources industries, saw a drop in both revenue and profits in the first half of the year.

In the six months to June, group revenue was down to £17.4 million from £18.4 million a year, seeing a fall of -5%.

In the UK, where the firm derives the majority of its sales, revenue dropped by -8% to £11.5 million. In North America, revenue was also down -8% to £4.7 million while the Asia Pacific region reported a strong +63% increase in revenue to £1.2 million.  

Gross profit declined by -5% to £15.4 million, compared to £16.3 million in 2011. The gross margin declined slightly to 88.4% from 88.5% in the first half of the year.

Operating profit more than halved to £0.22 million compared to £0.64 million a year ago. Overall, profit attributable to owners was up to £0.17 million, compared to £0.002 million.  

“The staffing software market remains challenging and while we remain cautious about the UK and USA, the group is well placed to take advantage of continued growth in key emerging markets and to prosper when growth returns to the economy,” said chief executive Steve Russell.

Business was holding up in Asia where the firm has continued investment and expanded operations, this leading “to a significant contract win in Japan”, said Mr Russell.

Bond said that its recruitment software division experienced “difficult market conditions”, particularly in the UK due to an absence of “sizeable licence sales”. Overall, revenue in the firm’s largest segment dropped by -11% to £10.1 million from £11.4 million a year ago.

The HR & Payroll division, which targets small to medium-sized companies in both the private and public sector, has also seen revenues fall by -5% to £2.3 million.

Outsourcing services saw an increase in revenue, which was up to £4.9 million from £4.6 million year-on-year.

In early trading this morning, the company’s share price was down by -8.9% to 55.10 pence, a +23.8% increase from a year ago, but -13.9% below its 52-week high of 64.0 pence seen in September 2012. The firm has a market value of £22.13 million.

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