Impressive revenue growth: eg has announced revenue growth of 67% for 2015, ahead of our 62% forecast. As demonstrated by the local government contract win announced in January 2015, new business continues to drive growth. We would assume, given the upbeat tone, that profitability and cash generation are also solid. 

Visibility improving: Recurring revenues grew 69% during the year, now standing at 50% of the total for the current year. This reflects a number of multi-year contracts being signed in 2014, and also the increasing takeup of eg’s managed cloud product. 

£15m Order book re-iterated: The order book currently stands at £15m which is to be recognised over the next three to four years. This is £2m higher than was disclosed at the interim results, and gives further confidence in revenue outlook, given eg’s annual revenues of c£7-8m. 

Forecasts left unchanged for now: FY15 revenues were ahead of our forecast, and we note management’s comments that results overall will be ahead of market expectations. We believe our forecasts to be in line with market consensus. For now, we choose to leave unchanged our forecasts for FY16 and beyond. We will revisit these estimates as the year progresses. 

We highlighted the ongoing momentum in the eg business in our recent coverage initiation report (eg solutions: Putting the Back Office on the Front Foot, 27 January 2015). With annual revenue growth confirmed at close to 70%, the return to profitability, and good revenue visibility from the £15m order book, today’s announcement does not disappoint.