The perils of being a small UK software player serving mostly international markets does rather leave you at the mercy of currency exchange rates. Such was the case for London-based supplier of business process management software for broadcasting companies, Pilat Media Global, which turned a £0.26m pre-tax loss in Q1 (to 31st March) due to a £0.4m currency headwind. This was after a rather pleasingly profitable 2010 (see Record results at Pilat).
Revenues grew by 4% yoy to £5m (just 6% from the UK), with gross margins 6 points lower at 44%, mainly due to more implementation services and pass-through revenues. Underlying maintenance revenues rose by nearly 13% - good recurring stuff.
And herein lies their other challenge. Pilat seems to deliver implementation services itself, so the more successful it is selling licences, the greater the bottleneck in delivery. I don’t know them at all well, but if they haven’t any services partners yet in place, now might be a good time to start looking!