Energy unit wins three contracts
In its brief AGM update, Brady (BRDY.LONDON) said that Q1 trading has been in line with expectations. The group has signed five new significant contract wins in the year to date – two in Recycling in Q1 and three Energy deals all announced in April. In March, we noted the group had its largest ever pipeline of new business while it had also been broadening its geographical spread and focusing its sales effort on winning larger contracts. The new Commodities unit (which combined the Physicals and Metals units) has been busy delivering the new business signed in FY13, including with a global trading company that signed late in 2013 and has now gone into production. In our view, the shares continue to look attractive on c 12x our maintained cash-adjusted FY15 EPS if the group can continue the deal-signing momentum.
Following the update, we are maintaining our forecasts. Today’s statement shows the group’s Energy unit is continuing to regain traction after last year’s restructuring. Further deal flow news is anticipated across the group’s three operating divisions in the traditionally busy Q2. We note that Q4 is typically the group’s busiest quarter, followed by Q2 and Q3, with Q1 the quietest.
Brady Energy, the group’s Energy unit, has signed traditional software licensing deals with Delta Energy in the Netherlands and ElectroRoute Energy Trading in Ireland for its Power Scheduling and Nomination solution, which facilitates cross-border trading activities. It has also announced its first cloud delivery of the new Energy Trading and Risk Management solution with Vantaa Energy, one of Finland’s largest municipal energy companies.
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