Brady

LN: BRY

£23.3m market cap

28p last close

Brady is the largest Europe-based E/CTRM player. It provides a range of transaction and risk management software applications, which help producers, consumers, financial institutions and trading companies manage their commodity transactions in a single, integrated solution.

Investment summary

With the company expecting FY19 revenues of c £19m, c 22% down on our previous forecasts (£24.3m), new sales have slowed markedly since Brady’s last trading update on 30 May. With Brady trying to affect a turnaround in the face of market uncertainties, we now anticipate a PBT loss of £4.2m in FY19 (previously £1.0m) with FY19 net cash falling from £2.7m to £1.2m net debt. We have withdrawn our FY20/21 forecasts pending further clarification expected with the interim results on 23 September. When Brady demonstrates renewed sales momentum, it should become an attractive investment on an FY19 EV/sales multiple of 1.5x.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 22.2 (2.6) (3.0) (5.7) N/A N/A
2018A 23.2 0.7 0.3 0.0 N/A 23.3
2019E 19.0 (3.9) (4.2) (4.0) N/A N/A
2020E N/A N/A N/A N/A N/A N/A
Last updated on 19/09/2019
Industry outlook

Brady operates in the E/CTRM space, providing trading, risk and connectivity software solutions to the global commodity and energy markets. The global E/CTRM market was worth c $1.65bn in 2016 (Comtech) and is forecast to grow at c 6% CAGR 2016–2020. Brady has a strong position in niche areas including commodity logistics, credit risk, metals (number one globally) and European energy, yet has a relatively modest market penetration overall (we estimate 1.2%).

Last updated on 19/09/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 1.2
Forecast gearing ratio (%) 8
Price performance
%
1m
3m
12m
Actual (50.4) (51.1) (57.7)
Relative* (52.1) (50.7) (57.6)
52-week high/low 66.5p/27.5p
*% relative to local index
Key management
Carmen Carey CEO
Martin Thorneycroft CFO
Ian Jenks Non Executive Chairman

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