The first six months of the year have been good to Bond International, which seen a significant improvement on conditions in the same period last year. But the HR software and services provider is cautious about the outlook for the second half particularly in its UK and US markets. Martin Baldwin, Chairman, says staffing companies in these markets still seem reluctant to commit to significant capital projects in light of continued economic uncertainty. The prospects for its nascent Asia Pacific operation are rosier though and Bond has ‘high hopes’ for its business in Japan and China in the medium term.
For now, however, Bond is grateful for strong acquisitive and organic growth in the first half and a return to profitability. Revenue increased by 40% to £18.4m thanks both to the acquisitions of VCG and the remaining 50% of Strictly Education Solutions, and to 13% organic growth. Recurring revenue increased by 37% to £11m (7% organic growth), representing 60% of total revenue - a slight decline on the previous year (FY10: 62%). PBT was £533k, compared to a loss of £846k in the first half of 2010.
Revenue at the Recruitment Software division was 42% up in the first half (19% organic) to £11.4m (£5.5m from the UK) despite continued slow demand for recruitment software from traditional recruitment firms. More specialist recruitment firms have been investing though, and Bond benefited. In contrast, the HR & Payroll software division, which targets SMEs in both the private and public sector, saw revenues decline 5% to £2.45m. Margins at the division improved though – operating margins increased to 42% from 29% in H110.
Bond’s other division, Outsourced HR & Payroll Services, combines the Strictly Education business (which provides outsourced HR, payroll and other services to schools in the state sector) and Bond Payroll Services, which does what it says on the tin - provides payroll bureau services. Strictly Education grew revenues by 107% to £3.6m (some of which is reportedly organic though we’re not told how much). Revenue from Payroll Services was up by a more sedate 12% to £960k. Despite pressure on budgets in the UK public sector, the outlook for the education business is actually quite good. The government’s Academy Programme has been driving consultancy spend in this area, which Bond has benefited from, and continued growth looks likely as more schools gain autonomy and look for ways to reduce costs. This is unlikely, however, to be sufficient to compensate for any slowdown in Bond’s larger recruitment software business in the months ahead.