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Is the Richards rally over at WANdisco, the UK software group?

Shares in the big data specialist have almost tripled since the company went through a series of boardroom changes last Autumn, but they dropped almost 9 per cent in early trading on Wednesday despite the company hitting expectations with a sharp rise in bookings and heavy cost cuts.

Chief executive David Richards stepped down under board pressure in late September before returning within days with shareholder support as chairman Paul Walker walked instead.

Total bookings for 2016 increased 72 per cent from $9m to $15.5m. Revenue for the year rose 4 per cent to $11.4m. The loss before tax, stripping out exceptional items, reduced from $30.4m to $18.2m.

Adjusted earnings before interest, tax, depreciation and amortisation reported a loss of $7.5m, against $16m last time.

Cash overheads were reduced by $11.2m to $23.4m while it burned just $200,000 in the last quarter.

Deferred revenue from sales booked during 2016 and in previous years, and not yet recognised as revenue, was $12.5m at 31 December 2016, up from $9.8m the year before.

WANdisco has shed much of its sales force this year in favour of partnering with big IT companies. IBM now sells its Fusion product as Big Replicate. It allows continuous access to changing data and migration from on site data servers to cheaper cloud computing.

It won $1m orders from Hewlett Packard for Dubai’s Smart City project and from IBM for a carmaker, and a $1.5m deal with Oracle working with a large commercial bank.

Mr Richards, who is also interim chairman, said:

We have 5,000 people in IBM’s sales force selling our product. Those bookings turn into revenue. It’s a growth platform.

This is the first time we have been able to harness what the numbers are telling us. We do not have to project what we are going to do: you can see it.

He said the Sheffield based company, which also has bases in Belfast and California, was a “true tech business”. He added: “We license our intellectual property. We can grow without adding costs.”

He said that in 2015 the market for Big Data in the cloud was $1.1bn but it should grow to $22bn by 2026.

There was exceptional finance income of $8.1m as the company adjusted intercompany balances for the drop in the pound.

Analysts expect profitability in 2019.

Shares in the company were down 7.3 per cent at publication time, to 493p.

Copyright The Financial Times Limited 2017. All rights reserved.
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