London Bridge Software Holdings Plc, the stock market debutante which sells large scale credit risk management systems to banks and utility companies, has hit a 42% net profit margin in its first year as a quoted company. And according to founding chairman Gordon Crawford, 1997’s margins were actually held back by substantial investment. The London based software house has just reported net profits for the year to December 31 up 69% at 2.8m pounds on revenue that rose 80% to 11.3m pounds. The absolute figures are still small, but with all four major UK banks as customers and around 80% of the top 100 US banks already on board, make no mistake about where this company is headed. London Bridge’s track record of revenue and earnings growth is impeccable, and the rise in the company’s share price is almost unprecedented. The shares were placed in March last year at 200 pence (CI No 3,120) and they closed on Thursday at 662.5 pence, up a further 7.45% on the day. Crawford is understandably happy with his achievements, and his personality and single minded pursuit of software excellence is written large all over London Bridge’s success. The personal rewards for him have also been enormous; his 74% majority shareholding has grown by 100m pounds in just eleven months. Crawford encapsulates what his software does as changing the emphasis on traditional forms of debt collection. It’s aimed at companies with large numbers of small debtors, like banks, utility companies or mobile phone operators, and it gives them a more sophisticated system for managing the inherent risk in each overdue balance. Collection methods are tailored to reflect individual circumstances, and high value customers are nurtured not threatened. The recent purchase of the group’s only serious competitor, based in the US, has paved the way for huge transatlantic cross selling opportunities, says Crawford, and based on his past track record, 1998 should be a phenomenal year for London Bridge. The board has proposed a maiden dividend of 3.0 pence per share.
