Where does today’s warning leave commodities trading technology supplier Brady?

New business has apparently dried up for Brady (BRY:AIM), the commodities and energy markets trading platform provider, and that means missing forecasts this year. ‘The board has concluded that full year revenue will be circa £19m, and this will have a consequent impact on EBITDA performance,’ the company said today. EBITDA is earnings before interest, tax, depreciation and amortisation. Brady’s share price has been smashed, down 37% at 35.5p, valuing the business at less than £30m in market capitalisation terms. HOW BIG IS THE MISS Consensus estimates already anticipated declining sales, with Reuters’ figures showing £22.5m of revenue before today’s update, down about £700,000 on last year. Quite where this will leave EBITDA is anybody’s guess. The company isn’t saying and, so far, we have seen no new analyst forecasts. It won’t be the £3.5m where consensus was pitched, and who knows, the company could be even looking at red ink on the EBITDA line. There’s soothing talk of ‘positive engagements with existing customers,’ and that ‘recurring revenue is in line with expectations,’ but bigger questions need answering. SLOWING GLOBAL GROWTH, MAYBE RECESSION First, is the drought of new business merely a symptom of wider macro issues? There’s increasing talk of a slowing global… continue reading

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