Brady Plc, the supplier of trading and risk management software, today announced that over the last six weeks it has signed four new contracts to add to the Group’s positive view of 2014. Two of the contracts are with the cross-asset trading businesses of a Brazilian bank and a US trading company, with the other two deals in the US recycling industry.
As we wrote in our October HotView, the company is the leading independent in its particular niche and the long term outlook appears strong. However, the writing of cloud-based contracts defers revenue and profit and this has increased concerns about results for the second half year (to December). The company will be issuing a trading update later in January. This is expected to emphasise the momentum that the company is generating through the signing of new contracts and to give the new Finance Director, Martin Thorneycroft, an opportunity to present his case for optimism about profit and cash flow. We consider that Brady has the components necessary for success but, as with many emerging cloud suppliers, we may have to be patient.