Bond International - Strong growth at a reasonable valuation

Slap - I am suprised that you didn't examine the balance sheet closer. Just to point it out for you. Creditors due within 1 year is primarily made up of Deffered Income. Approximately between 60% - 65%. Therefore approximately £3m of the £5.1m is actually defered income. Correct Accounting treatment for revenue received to split over the course of the months

Dr Sales
Cr Defered Income.

As the sales are realised

Cr Sales
Dr Defered Income.

Therefore the balance sheet is actually a lot stronger than you would lead people to believe. The remaining increase is due to:-
"In February 2005 we announced the acquisition of PDI for a total consideration of $2.8m of which $1.7m was paid upon completion with a further $1.1m payable in February 2006" - Therefore an additional $1.1m still to pay.

Also - And if you had read the accounts with any care you would have stumbled upon the following:-

"Product development expenditure totalled £984,000 in the first half of the year representing 16.6% of sales. Of this £308,000 was spent with a third party on developing the next generation of Adapt bringing the total spent on the project to date to £1,646,000. This expenditure is now substantially complete."

This accounts for the substantial increase in Admin costs as all R&D costs are written off to the P&L.

Here are some of the highlights:

Operating profit before the amortisation of goodwill rose by 59% to £1,255,000 (2004: £788,000) and pre-tax profits increased by 50% to £1,070,000 (2004: £711,000).

The net cash inflow from operating activities was £1,456,000 during the first six months of 2005

Our order book in the UK is at its highest level for nearly five years which taken together with the contracted recurring income gives us reason to be optimistic for the Company’s prospects for the second half of 2005.

So yes, I do believe in the company and yes I do believe they will suprise the market.

gg