… brushes itself down and starts all over again. Well perhaps not quite the latter, but given that trade and logistics software firm, Kewill, spent some four months last year under a bid approach, they’ve turned in a pretty respectable set of results. Indeed, headline revenues grew by 7% (3% organic) to £60m, operating margins expanded a point to 5.7% and EPS soared 45% to 5.8p.
The regional mix was a bit ‘swings and roundabouts’, with European revenues up 9% (12% at constant exchange rates, CER) to £36.5m, now 61% of the total. Europe is Kewill’s most profitable region, with 21.5% adjusted operating margins. Revenues in the Americas fell by 3% at CER to £20m (flat as reported). There were multiple issues at play here, but the one I quizzed CEO Paul Nicholas and new CFO David Gibbon about was the reluctance of some customers to migrate to newer Kewill products. They told me that these were mainly customers picked up through Kewill’s 2004-2007 acquisition spree who were running on products which have since been ‘sunsetted’. Some customers are staying put, others went to competition. But Kewill is bringing out newer products which it hopes will provide more attractive migration paths.
Asian revenues raced ahead 22% (11% CER) to £3.6m and are now 6% of the total. Asia seems to hold great promise for Kewill, but the region is still only marginally profitable. But Nichols and Gibbon explained to me that Asia also carries the R&D cost for 80 FTEs in Shanghai (of some 200 R&D FTEs in total) which weighs disproportionately heavily on regional profitability. But most of the year’s revenue growth in Asia worked its way through to the bottom line, so you might expect to see further margin improvement.
Now let’s see what this year brings.