- Bond specialise in recruiting software, although they are diversifying into the broader human resources sector. I suspect they are vulnerable to an economic downturn (which I think could be on the cards in the UK over the next couple of years), but I think they can weather the storm, since they have little/no debt on their books (net debt of about £3.5m as of their latest interim statement, but they have since raised £5m from issuing shares at a very favourable price: >200p). According to their interim report, recurring revenue covers 61% of their overheads, which I think puts them in a strong position.
- They are growing both organically and through acquisition. Gross profit in the 6 months to end June 2007 was £13m, compared to £7m the year before. Basic earning per share to the end of 2006 were 13.66p. I bought at a price of 146p, so that puts it on a historical P/E of just under 11. Provided it can integrate its acquisitions well, I think 20p per share should be achievable in the next few years. Analyst estimates are for 15p in 2008 and 17p in 2009. A trading update in January has said that results are in line with expectations.
So all in all, I'm satisfied that this is a good company to invest in, and I think 146p is a good price.
That means I'm happy with all of my investments so far (even RBS which has dropped 10% of its value so far - if it drops further for no good reason I may buy more). I have a few candidates in mind for my next round of investment, and I'll post details when I've actually bought the shares.
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