The sales team at rapidly growing software firm Datum continues to deliver the goods, with revenues for the year to April 2010 set to be 100% ahead of the previous year. Full-year results are set to be announced on July 28th where the group also expects to reveal a maiden profit that is ahead of market expectations.

Importantly, the revenue growth reported above includes no contributions from the March 2010 acquisition of Root 3 – a deal which enabled the firm to add more features to its Knowledgeworker Enterprise Content Management System and thereby bid for projects of a “significantly higher value”.

At a mid-price of 9p Datum is capitalised at £4.6 million. In previous articles we have raised concerns about its funding position, with its last available balance sheet as at 30th April 2009 showing net current liabilities of £0.4 million. However, cash inflows from the superb sales growth achieved over the year coupled with the firm’s £0.34 million placing since the previous year-end mean that we would expect to see a significantly improved balance sheet. It should also be noted that the purchase of Root 3 gave it access to a large base of recurring revenues which also points towards a brighter future for the company.

In March house broker FinnCap produced a note on the firm in which it forecast earnings of 0.47p for the current year, putting the company on a current multiple of 19, falling to 10.6 next year. Since Datum now expects to beat these estimates there is scope for the multiple to fall further. All in all the superb top line growth being achieved and the firm’s move into the black means that we rate the shares as a buy.