Profits fuel growth plan

Jun 9 2009 by Karen McLauchlan, Evening Gazette

STOCKTON monitoring equipment firm Brulines Group said it was on the acquisition trail as it announced strong annual results today.

In the year to March 31, profit before tax and exceptional items rose 19.6% to £4.98m while sales increased 11.7% to £19.07m.

The company, which raised £4.4m from a share placing in December, is looking to buy other firms in the gaming and petrol forecourt sectors.

Last year it bought Sunderland fuel monitoring technology firm Edensure and Dunfermline-based Vianet, which provides telemetry and data capture solutions to the vending industry.

Chief executive James Dickson said the company was gearing up for further growth and eyeing “four or five potential acquisitions”.

He said: “Given the current economic climate we’re pleased with the results. We’ve had six years of consistent, sustainable growth.

“We do things right and the results tend to follow from that.”

He dismissed claims in a recent report that questioned the accuracy of Brulines’ beer monitoring equipment, which measures quality indicators of a pint of beer and manages data from more than one in three UK pubs.

“The report (by the Business and Enterprise Select Committee) is a non-issue for us. There is no legal status to it,” he said.

The BEC report called for an urgent competition investigation into the industry amid fears that ties between pub companies (pubcos) and licensees were forcing up prices for drinkers.

However Mr Dickson said he did not think the pub tie was anti-competitive.

“I don’t see the demise of the tie but even if this were to happen, pubs would still need to monitor their beer,” he said.

Brulines produces more than one million reports annually on the dispense and delivery volumes of around 23,000 public houses.

It is currently exploring the idea of a rental model, initially with the managed pub sector in the US, which will lease data management equipment to companies.

The equipment is being trialled in pubs in Denver and if successful, could offer Brulines a route to a US market with around 350,000 pubs and 60,000 chains.

Brulines equipment is also used to measure stock in vending machines and filter performance in coffee dispensers.

The company said: “As the leisure market becomes increasingly focused on profitability and cash generation from core operations, our products are becoming more important to our customers than ever before.

“There is also a continued and growing demand for the operational control that our services provide.”

Analysts are predicting further growth for Brulines, with profits expected to be as much as £5.4m next year.

The company’s share price rose by 9p to 111p on the back of the annual results, which saw earnings per share rise by 14.8% to 13.59p.

Gross margin rose from 53% to 58% as a result of increased recurring revenue, operational improvements and demand for bespoke reporting services.