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In its pre-close trading update for the year to December 31 2012, KBC Advanced Technologies referred to a ‘very strong’ final quarter and says results will be slightly ahead of market expectations, providing a £0.5m provision made for implementing a restructuring plan is discounted. This is a company who signalled that business was steady at the half year stage then just two months later warned of missed targets, a net loss and that it was running short on cash (see KBC blushes red on warning and cash call). It expects to end the year with cash balances of around £9m (excluding an advance payment from a large new contract) and net cash of c£1m. It ended FY11 with c£5.5m in cash.
The apparent turnaround (the profitablity issue is in question) seems to be due to two things – a $100m consulting and software contract with EP Petroecuador in Q4 and strong performance from the software side of the business, including the Infochem business that was acquired in June. And it is restructuring the consulting business, which was a contributor to its ‘red’ period during the year. It is good to see the energy sector software and services supplier making progress but its performance during the year indicates it is stretched which makes it harder to manage its way through change.
