JBA Holdings Plc has had a bitter-sweet year according to chairman Alan Vickery. Tremendous revenue growth at the Birmingham, UK-based ERP software house was let down by poor cost control, leading to a hefty shortfall in profits. Net profits for the year to December 31 were down 42% at 3.6m pounds while revenues rose 37% to 222m pounds. JBA’s forte is the development of supply chain management packages for specific industry sectors, particularly footwear and automotive. Sales of products with industry specific functionality have been excellent, while sales into the more general market place barely grew at all, and JBA said it planned to focus more on its specialist industries. But application development is an expensive business, and JBA’s acceleration of its R&D program in 1997 cost an extra 12m pounds of funds, a major factor in the lack of profitability. The company warned of the impending shortfall in February, and the market reaction was savage, chopping the share price in half. And the group’s long desired Nasdaq flotation now looks further away than ever. But with revenues growing so strongly and with JBA’s background as a solid and prudent company with strong ties to the US, the market reaction looks very heavy handed. The dividend for the year remains flat at 5.1 pence per share.
