Trayport Contigo ETRM / CTRM
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Brady Invests For Growth

Brady PLC released its’ preliminary results on March 14th. 2016 saw the company increase revenues by 11% to 30.3m GBP (up 2% on a consistent currency basis), and grew recurring revenues by 24% while license revenues were down to 3.6m GBP to make a 500k GBP profit before exceptional items for the year and a 1.9m GBP after tax loss while adjusted EBITDA increased 85% to 4.5m GBP.

2016 was a difficult year for many vendors in the CTRM space in, one in which buyers focused on reorganizations, industry change, lower commodity prices, and rising costs. Against that backdrop, Brady did 10 new license deals; 4 in commodities and 6 in recycling.The company parted company its’ longtime CEO, Gavin Lavelle, in September 2016 and has since been reorganizing itself. A new board led by Executive Chairman, Ian Jenks, has begun by implementing a one company approach, reorganizing its sales functions into a Value Enablement team focused on delivering value to new customers, and an account Management team focused on existing customers. It has also reorganized its product development team with a focus on Group priorities rather than local priorities and created a product team responsible for all products.

Having been through the growth cycle myself with an early US ETRM vendor, I know only too well how running a software business is about constantly refocusing through the different phases of growth. What works when you have five customers needs to be changed when you have 12-15 and so on. Brady has been through a period of growth mostly through acquisition of various local ETRM/CTRM and recycling software companies. The challenges of making a lot of acquisitions in this space in particular are well known and I daresay that Brady has faced them all along the way. One difference with Brady however, is the work it has done on developing a product framework – the Brady Framework – that allows it to rapidly build out web and cloud enabled services and products. By progressively migrating common functionality from its acquired suite of software, it has kept up and abreast of many of the technology changes in the industry and finds itself with a solid basis of a product suite that needs a bit more product marketing and direction. It appears that this is one of the changes that has been implemented by the company going forward and this bodes well for the future.

Additionally, if there was a time to reinvest, regear, and refocus, now may well be it. We are beginning to see a few shoots of a recovery across the industry, but the plants those green shoots represent are a different animal of CTRM – most likely cloud delivered, web-enabled, with a graphical and intuitive UI. As Mr. Jenks points out, Brady is in a strong financial position. Not only does it have a very healthy balance sheet with 7.3m GBP net cash but it has a contracted revenues of 24m GBP. Essentially, the company is moving towards a single focus on the customer and delivering products and services with a more singular focus in the future.

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