Hate queuing for the doctor? Invest in this tech firm and we’ll all feel better
MENTION ‘robotics’ and most people think of automated machines, powering around factories and taking jobs from ordinary people.
Blue Prism is different. The company is a pioneer in robotic process automation, a fancy way of describing computer software that helps businesses do boring tasks more efficiently.
The company joined Aim in 2016 at a price of 78p. The shares enjoyed a meteoric ride over the following two years, soaring to over £25 by last summer. Since then, they have nearly halved to £13.44, hit by general stock market volatility and particular concerns about tech businesses, like Blue Prism.
At the current level, they are a buy, especially for investors with a medium to long-term time horizon. The group is growing exceptionally fast and, from humble beginnings in Warrington, has developed into a world leader in its field.
Co-founded by chief executive Alastair Bathgate in 2001, Blue Prism has more than 1,000 customers, including Coca-Cola, Heineken, Daimler Benz, Jaguar Land Rover, eBay and Walgreens, which owns Boots.
Businesses use Blue Prism software in all kinds of ways. One major South African firm uses the robotic process to avoid paying the same invoices twice – a move that has delivered savings of £35 million. Consultancy EY has cut travel costs by over £300,000 a year, using Blue Prism kit to help employees book trains, planes and hotels early.
The NHS turned to Blue Prism when it began installing self-checkin kiosks so that patients no longer need to queue at reception to regis- ter. All these organisations pay Blue Prism a fee to use its software and last week, Bathgate revealed that revenues surged by 125 per cent in 2018 to £55 million, as new customers came on board and existing ones bought more.
The robotic processing automation sector is highly competitive however and is dominated by three firms, Blue Prism and two privateequity owned groups, Automation Anyway and UiPath. Keeping up with rivals is expensive. Bathgate needs to invest in research and development, open new offices around the world and spend money on marketing so businesses turn to Blue Prism rather than its peers.
The 2018 figures, therefore, were accompanied by a £100 mill i on fundraising, where major shareholders were invited to buy new stock at a 5 per cent discount to the prevailing price. The shares were snapped up in a couple of hours, a strong sign of confidence in Blue Prism’s prospects.
Shareholders do need to be patient however. Even as revenues are growing, losses are increasing too, largely because Blue Prism is investing in future growth. Employee numbers, for example, grew by 66 per cent to 469 last year and the firm opened new offices in France, Germany, Singapore and Hong Kong.
The group also invested heavily in sales and marketing and product development and such investments are expected to continue.