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Brulines: results looks highly encouraging so why the 9% share price fall?
Posted 01/12/09
The market leading provider of real time monitoring systems and data management services for the UK leisure sector, announced its interim results for the six months ended 25 September 2009. The cash generation should encourage!.
Turnover was up 11.3% to £9.90m and profit before tax was £1.90m post exceptional items of £0.3m and increased intangible amortisation of £0.1m (H1 2008: £2.17 million)
Operating profits before the exceptional reorganisation charges were dragged back as a result of the trading losses incurred at Vianet and Edensure. These two businesses were purchased in October and December 2008 respectively, and the integration has progressed well with Edensure now performing around breakeven levels and the inherited losses at Vianet much reduced. Management is hopeful that both companies will start to make contributions to Group profit early in the new financial year.
Basic earnings per share at 4.85p (H1 2008: 6.11p) were impacted by the December 2008 placing. Like for like EPS would have been 6.49p representing 6.2% growth
Recurring revenues now accounts for over 70% of Group turnover
The interim dividend was up to 1.63p (2008 interim dividend 1.55p).
The partnership with Greene King Pub Partners to supply Brulines’ leading i-draught beer quality and dispense monitoring system as their primary system in its estate of 1,400 pubs throughout the UK was clearly a major highlight. The i-draught system offers pub licensees a vital tool to monitor the quality and yield of beer served, providing valuable intelligence about their business to help them to improve beer quality, manage wastage and costs on all draught products.
Brulines announced on 24 September 2009, that it had made a preliminary approach to Universe Group plc (AIM:UNG) relating to a potential offer for the issued share capital of Universe. In pursuance of this transaction, Brulines has purchased 11.52% of the share capital of Universe at prices between 3.9 and 4p (Current mid price 4.25p). Unfortunately, agreement for Brulines to undertake the necessary due diligence has not yet been reached, and they continue to seek ways to resolve what amounts to a somewhat significant hurdle!
The Group generated operational cash flow of £2.29m in the period of which £1.04 million has been used for the dividend paid in July 2009, and £0.53m used for the equity investment in Universe Group.
Net cash at the period end was £4.06m.
Chairman James Newman commented that they see good growth prospects for the Group, in particular in the Petrol Forecourt Division.
It all looks encouraging but this didn’t prevent the shares falling c9%, however, it’s worth noting that this was only on a volume of 19,500 shares so hardly significant!
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