Sky-high selling helping orders take off at technology company

LThe Bradford-based company revealed it has won an order worth just under E1m (£783,000) to supply 500 handheld sales devices to Air Berlin.

The latest deal for Belgravium’s Novo subsidiary adds to contracts with airlines including British Airways, Jet2.com, Thomas Cook and Virgin Atlantic.

“There’s plenty to go after,” said Belgravium managing director Mark Hardy.

“There’s an awful lot going on. When the banking crisis happened everything stopped and margins at airlines were very low.

“But there’s only so long they could put it all off for. The advantage of our product is it’s a big revenue earner.”

As well as aviation, Alternative Investment Market-listed Belgravium targets sectors including warehousing, fleet telematics, fuel distribution and utilities.

It employs about 70 staff across three subsidiaries: Warehousing division Belgravium Ltd, logistics and fleet business TouchStar Technologies and aviation arm Novo.

Last year Belgravium and its partner Tourvest Duty Free won a software and hardware contract to provide 1,900 handsets to British Airways.

“There are quite a lot of airlines that three to four years ago went away from us for half the price but are now knocking back on the door,” said Mr Hardy.

“We’ve just won a fairly sizeable contract with Air Berlin. It’s just under £1m euros. They are spending money. We’re very confident.

“It’s not a saturated market. Novo has been around for a long time and has seen competitors come and go.”

Airlines are keen to grow “ancillary” or retail revenues during flights in the face of pressure from rising fuel costs and low consumer confidence.

Budget airline Ryanair recently reported 15 per cent in first quarter ancillary revenues to E285.9m, despite a steep fall in profits. “Once people make that travel decision they seem to want to spend,” said Ryanair finance director Howard Millar. “It’s slightly against what you would expect.”

Leeds-based Jet2.com, owned by Dart Group, also grew retail revenue per passenger eight per cent to £27.86 in the year to the end of March, from £25.84 a year earlier.

Earlier this year Belgravium won a deal to supply 186 handheld devices to Jet2.com. The package includes stock analysis capability to help warehousing, deliveries, bar packing and other logistics.

Belgravium’s Novo arm is also upgrading its technology, including developing an offline chip and pin device to improve its current swipe card proposition for airlines.

Belgravium also sells mainte- nance contracts with its devices, which cover accidental damage and provide recurring revenues.

“If you’re making a rugged product, they don’t come back very often,” said Mr Hardy. “Once a customer is committed to a three-year payment, they don’t have to worry about that product.”

Another recent Belgravium contract involves supplying its real-time handheld terminals to Express Gifts. The firm, a subsidiary of home shopping group Findel, will use the terminals at its despatch operations in Lancashire.

Mr Hardy said the group is also increasing its presence in the logistics market, where it believes thousands of operators could benefit from its in-cab technology.

“There are lot of little players out there and we’ve got the product suite to take it into the general transport market,” he said. “We’ve never moved it into delivering boxes of widgets. There’s a massive market out there for that.”

Belgravium more than doubled pre-tax profits to £1m in 2011 on revenues up more than a third to £11.2m. That allowed the resumption of dividend payouts at 0.1p per share. The company also moved to a £1.2m cash position at the year-end, after eradicating debt from a former acquisition.

“We want to be debt-averse, but we wouldn’t say we’ll never borrow again,” said Mr Hardy. “If there’s a business case to do something with it we would borrow again.”

However, the company has a market value of just £7.3m, which he admitted is “disappointing”.

“We might have more cash than our market capitalisation, the way things are going,” he said. “We would say the share price is too low.

“The restoration of the dividend should show that we are serious about being on the stock market.”