Impressive H1 growth: eg expects to report revenue of £3.6m for the first half, a 16% improvement on the £3.1m underlying revenue delivered in H1 13/14. The disclosure of a first-half pre-tax loss of £0.3m reflects operational investment, including enhanced sales and marketing capabilities, in new products. With the January-15 fundraising, eg highlighted that FY15/16 profitability would be dampened by investment. We expect this to be ongoing in H2, but anticipate PBT breakeven for the period leaving our FY16E PBT estimate at the same level as eg reported for H1. 

Revenue visibility remains high: The order book now stands at £15.5m, to be recognised over the next three/four years. This represents a £2.5m improvement on H1 14/15 and a further increase on the £15m disclosed in March-15. Note, the current level represents 174% of FY16E revenues and 107% of FY18E, providing further confidence in eg’s ability to hit its targets. 

New product launches to drive growth: eg has announced two new product launches scheduled for September 2015. eg forecasting and eg mobile enhance the functionality of the eg intelligence software suite, and have been developed in response to customer demand. 

Cash position remains solid: With eg disclosing a net cash balance of £3.1m at 31 July, the company’s financial position remains solid. eg raised £3.2m in January 15, and is making significant ongoing investment in the business. With cash only £100k lower in July, this implies strong underlying cash flow performance. 

Today’s release provides welcome confirmation that momentum delivered in the first half of FY15/16 is being sustained into the second half. We note the share price currently sits at the same level as when we wrote on the stock in March. With momentum ongoing, good revenue visibility (note the £15.5m order book) and a solid £3.1m cash position, eg seems well set to deliver full-year targets.