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*New Research* Atos UK: Confident for full year
27 Jul 2016
CGI Q3: Return to organic revenue growth
27 Jul 2016
Capgemini UK: H116 private sector strength
27 Jul 2016
Post-Brexit delays and uncertainty for Capita
27 Jul 2016
Worldline delivers in first half
27 Jul 2016
Daimler flags down 60% share in Hailo
27 Jul 2016
Security and cloud drive modest OBS growth
27 Jul 2016
Class act FDM just keeps getting classier
27 Jul 2016
Unisys makes big swing into Q2 profitability
27 Jul 2016
ARM as expected
27 Jul 2016
Organic growth eases as Sage parties in Chicago
27 Jul 2016
Atos raises full year expectations
27 Jul 2016
Twitter disappoints...again
27 Jul 2016
Pleasant surprise from Apple
27 Jul 2016
IP EXPO Europe: 5-6 October 2016 ExCeL London
27 Jul 2016
Openreach: the dance goes on
26 Jul 2016
Idox acquires social care player Open Objects
26 Jul 2016
UK’s Big Data Partnership snapped up by Teradata
26 Jul 2016
GB Group making good progress
26 Jul 2016
NEW RESEARCH: BREXIT effect on UK tech stocks
26 Jul 2016
Pythagoras goes global with British Musuem
25 Jul 2016
NPS invests in Digital Case File solution
25 Jul 2016
Yahoo sold to Verizon for c$5b
25 Jul 2016
Civica adds SFW: boosts Whitehall digital business again
25 Jul 2016
Gresham indicates a strong first half
25 Jul 2016
Tungsten’s new management resets the outlook
25 Jul 2016
Proxama looks to its beacon network
25 Jul 2016
Mphasis emphasises profitability
25 Jul 2016
CityFibre caps encouraging H116
25 Jul 2016
Netdimensions slumps on revenue warnings
25 Jul 2016
Are you ready to Surf the Waves of Disruption with us?
25 Jul 2016
NEW RESEARCH: Measuring Digital Services
25 Jul 2016
Why more software and IT services companies use NetSuite than any other system
25 Jul 2016
Vodafone reports Q1 trading update – in Euros
22 Jul 2016
SCC partners with Little British Battler, mhub
22 Jul 2016
Bond intent on gradual dismemberment
22 Jul 2016
Workday brings data discovery youngster Platfora into the fold
22 Jul 2016
Escher looking fresh in H1
22 Jul 2016
NEW RESEARCH: IndustryViews Corporate Activity – Q2 2016
22 Jul 2016
Tesla's Master Plan Part Deux
22 Jul 2016
Smartwatch market plummets
21 Jul 2016
Mike Tobin - 7 down/33 to go...
21 Jul 2016
Sopra Steria dons its kilt again!
21 Jul 2016
Stand out from the crowd in UK Tech this autumn
21 Jul 2016
Claranet buys Surrey-based Ardenta
21 Jul 2016
IFS solid in Q2
21 Jul 2016
Osirium H1 hiatus, but sales up 45%
21 Jul 2016
Monitise uphill struggle to recovery
21 Jul 2016
OBS expands DaaS portfolio with Log’In Consultants acquisition
21 Jul 2016
Rocket boosts homecare startup HomeTouch
21 Jul 2016
NPS and HISL win Scottish screening deal
20 Jul 2016
Cloud progress at SAP in Q2
20 Jul 2016
EMC Q2 revenue declines; Dell merger approved
20 Jul 2016
Accenture Digital buys in MOBGEN development expertise
20 Jul 2016
Business headed the right way in Q4 for Microsoft
20 Jul 2016
Eckoh buys K2C to boost omni-channel capability
20 Jul 2016
Those IMF growth forecasts
20 Jul 2016

UKHotViews©

 

Wednesday 27 July 2016

*New Research* Atos UK: Confident for full year

Atos logoFollowing the release of this morning’s results from Atos, which revealed the highest level of organic growth for the business since restructuring began in Q114, we had a Adrian Gregory photocatch-up with UK&I CEO, Adrian Gregory (pictured).

He was in a positive mood; the recovery in the Q2 results, following an unusual Q1 (see Q116: Revenue dip as expected), was as he had promised. And, importantly, Gregory confirms that the UK business has secured all of the major contracts it needs to return to growth in H216 and, hence, maintain revenues at FY15 levels over the full year.

TechMarketView subscribers can learn more about how the UK business is achieving these results, and the business unit's prospects, in the UKHotViewsExtra article, Atos UK: Confident for the full year. If you are not yet a TechMarketView subscriber, don't hestitate to contact Deb Seth to find out how to rectify the situation.

Posted by Georgina O'Toole at '18:02' - Tagged: results  

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Wednesday 27 July 2016

CGI Q3: Return to organic revenue growth

CGI logoCGI’s Q3 results (to end June 2016) reveal just 0.6% growth on a constant currency basis, to CAN$2.7b. Foreign exchange fluctuations pushed the growth rate up to 4.2% at the headline level. Notably, this is the first positive organic growth rate reported by the company for quite some time (see CGI Q116: UK reports solid revenue growth). Declines have been a constant feature of the landscape since the beginning of 2014, when planned revenue run-offs started impacting performance. There’s also positive news on the adjusted EBIT front – the 14.6% margin (up 10bps) takes the level back to pre Logica acquisition days.

Michael Roach, CEO, indicates that it is clients working with CGI within transformational outsourcing agreements, releasing “run” costs to invest in their “change” agendas, that is having the positive impact. We have written extensively about CGI’s digital strengths, including its growing portfolio of IP solutions, in a variety of reports (see CGI simplifying digital complexities and Digital transitions: supplier progress). It looks like the UK is having particular success. Following a strong Q2, the second half has got off to an impressive start. UK revenues increased by 11.4% at constant currency to CAN$370m (headline growth was 9.4%). But it does always seem to be a different vertical which is the star of the quarter; this time it’s the turn of the government and financial markets (new business) and the telco and utilities markets (higher volumes). Other geographies that grew were France and the offshore operations in Asia Pac.

In terms of the UK’s adjusted EBIT (up from 8.6% to 10.4%), we see a consistent story across the results of all the major SIs reporting in the last 24 hours (see Capgemini H116: Private sector strength and Atos raises full year expectations). All have reported improvements in their operating margins. And all have mentioned the productivity improvements they have made in their infrastructure/managed services businesses, through automation and industrialisation. It is the ability of the onshore players to improve their efficiencies so effectively through the application of new technologies, that is giving the Indian Pure Plays (IPPs) a run for their money (see Offshore Views Q116).

Posted by Georgina O'Toole at '14:45' - Tagged: results   SI  

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Wednesday 27 July 2016

Capgemini UK: H116 private sector strength

Capgemini logoCapgemini appears in a confident mood as it announces its H116 results. A similar picture has emerged to the one we saw at in Q1 (see Capgemini’s digital business continues to motor). The group’s revenues, at €6.3b, were up 11.6% on a reported basis, up 14.4% at constant exchange rates, and up 3.3% organically (constant scope and exchange rate; iGate has been part of the Group since January). Organic growth was better in Q2 at 3.8%. The Group maintains its guidance for the full year of revenue growth between 7.5% and 9.5% at constant exchange rates (Capgemini comments that it is “closely monitoring the impact of Brexit" but has so far seen no change in market demand”). The adjusted operating margin improved by 1.5pts to 10.2%, with improvement across all regions and businesses (guidance for full year has been raised to 11.5%). Capgemini continues to benefit from its focus on margin progression, which includes ramping up its offshore resource (now 55% of employees); indeed, Nasscom now has Capgemini as the fifth largest IT-BPM employer in India (displacing HCL) (see here)!

Below the top-line, unusually Capgemini doesn’t report its regional and business performance organically. So, it is really difficult to understand the underlying performance (excluding iGate). All business lines were boosted by the iGate acquisition. Even the managed services business grew strongly, despite the anticipated negative impact of changes to the HMRC Aspire contract; once the iGate impact is included, reported growth was 9.3% at constant exchange rates.

For the record, UK&I, which now accounts for 17% of Group revenues, grew 8.6% (ccy). The operating margin improved 180bp to 14.5%. The emphasis in the results statement is on the private sector; contract wins are highlighted and the fact that the private sector now accounts for more than half of revenues. Indeed, organically, the private sector business achieved double-digit organic growth, while public sector was “down as anticipated”. Overall, we estimate a slight organic decline in the UK business. Where Capgemini continues to make great progress is in its cloud and digital business. Significant investment is really helping increase the company’s credibility here (see Capgemini’s Applied Innovation Exchange comes to London). At Group level, cloud and digital revenue growth was 32% - this part of the business now accounts for 28% of revenues. And it looks like the repositioning of the consulting business around digital transformation has really helped the UK performance.

Posted by Georgina O'Toole at '10:14' - Tagged: results  

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Wednesday 27 July 2016

Post-Brexit delays and uncertainty for Capita

lUK SITS and BPS market leader Capita is experiencing ‘increased uncertainty’ and ‘delays’ as a result of Brexit, particularly in the financial services sector.

In the H1 investor call, CE Andy Parker said Capita’s Asset Services business in shares, funds and trusts is being directly impacted because people aren’t looking to launch IPOs or funds, and it’s unclear when that might change. He is also cautious about the prospects for the property business, and sees private sector more uncertain across the board.

However, Parker sees the impact being short-term. He is bullish about Capita’s medium-term prospects, identifying ‘incremental opportunities’ from clients responding to the impacts of the UK leaving the EU.

Capita’s sound financial management has helped it deliver improved underlying organic growth of 5% in H1, despite a disappointing start to the year (see Capita finding life tougher and work back). There’s been more internal re-organisation, disposals and acquisitions to help get here (see Capita acquires Trustmarque from Liberata and work back).

Underlying revenue growth on a like for like basis was up 8.8%, and up 5% at the headline level to £2,405m. Meanwhile, underlying operating profits were up 10% to £317.6m – helping push the margin up around two basis points to 13.2%.

Capita has done a decent job of improving the bid pipeline too, which now stands at £5.1bn (February 2016: £4.7bn). However, H1 was tough on the deals front, with just £879m of major wins vs. £1.6bn last time. If the market deteriorates further, H2 is going to be tougher still, putting the 4% FY16 organic growth target at risk.

In our report Brexit implications for Business Process Services we assess the risks and opportunities for BPS providers like Capita post-Brexit.

Posted by John O'Brien at '09:42' - Tagged: results   bps   brexit  

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Wednesday 27 July 2016

Worldline delivers in first half

logoFirst half figures from Worldline, the payments and transactional services business spun out of Atos, deliver on two fronts. The underlying business showed strong growth and margin improvement and the Group’s strategic development continues as the Equens merger nears completion.

Headline numbers showed revenue of €615m, up 6%, with all three divisions reporting progress in international markets. The fastest reported growth was in Merchant Services and Terminals (34% of Group revenue, up 9%). Mobility & e-Transactional Services declared growth of only 4%, as it was hit by the ending of the UK VOSA contract. Excluding VOSA, the advance would have been 14.9%. Group operating margin before Depreciation and Amortisation rose to 19.1% (18.2% in H1 2015). Net cash continued to improve.

There is an acceleration in the take-up of new services such as the Connected Living portfolio where Worldline offers a device agnostic approach and a pay-per-use model to support IoT implementations connecting homes, cars, buildings etc. This should bolster long term growth and profitability.

The Equens merger, see here, is expected to close “before the end of the summer”. This deal will significantly strengthen Worldline’s position in European Payments, with improved scale in transactions processing and merchant acquiring.

Since the spin-out from Atos, the Worldline management has been able to inject some more pace into the business. This includes building scale in more conventional payments markets with the Equens deal, accelerating cost improvement plans and developing new services that leverage the more sophisticated ecosystems of modern commerce. The management have raised their guidance for 2016 revenue growth (although the termination of the large French “Radar” contract will take the shine off full year figures). The progress made is reflected in the Worldline share price which is up over 45% over the past year.

Posted by Peter Roe at '09:27' - Tagged: mobile   payments   iot  

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Wednesday 27 July 2016

Daimler flags down 60% share in Hailo

logoGerman vehicle manufacturer Daimler has acquired a 60% share in London-founded taxi hailing startup, Hailo, and will merge it into previously acquired taxi app, MyTaxi. According to TechCrunch, no cash changed hands.

Hailo was founded in 2011 originally as a ‘black cab’ hailing app, and later expanded to Ireland, Japan and Spain. According to Business Insider, it all started to go terribly wrong for Hailo in 2013 when it tried to conquer the New York cab market, and has struggled ever since.

Hailo had raised over $100m in venture funding since its founding, and will reportedly retain its original shareholders. All R&D will move to Germany.

The taxi app battleground now seems to be one between automotive manufacturers, with Toyota investing in Uber, GM investing in Lyft, and VW in Gett, all, we must assume, in anticipation of the eventual car-ownerless society. We’ll see.

Meanwhile, another UK tech startup - and all its innovation - leaves our shores. I guess another triumph for ‘inward investment’.

Posted by Anthony Miller at '09:15' - 1 comment - Tagged: acquisition   startup  

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Wednesday 27 July 2016

Security and cloud drive modest OBS growth

Orange H116 resultsOrange Business Services (OBS), the enterprise division of French telco Orange, saw revenue grow 0.6% to €3.2bn in H116.

IT and integration service revenue grew by 8% to just over €1bn due to “strong growth” in security services and cloud, glossing over figures for voice (€757m) and data services (€1.4bn) which were down slightly on H115.

The figures indicate a sustained if modest turnaround for OBS which has now seen slight revenue growth for the second quarter in a row, though parent company Orange does not split the numbers by geography.

Most, if not all, of OBS’ UK turnover comes from the supply of IT services and network connectivity to the local branches of multinational customers. The contract OBS won to provide network connectivity to German headquartered global chemical, pharmaceutical and life sciences group Merck last month is a typical example.

OBS is showing signs that it is picking up more of this type of contract. But we think that significant revenue growth will only come if it can move beyond network connectivity into more profitable cloud, security, application hosting and IoT deals. The acquisition of specialist desktop as a service (DaaS) player Log’in Consultants earlier this month certainly demonstrates OBS’ cloud ambitions and the company must now use this asset to drive further into the hosting business.

Overall results for Orange, which provides additional broadband and fixed/mobile voice services in countries across €ope, Africa and the Middle East, were equally understated. The telco saw revenue flat yoy at €20.1bn with EBITDA also static. Net income after tax grew to €3.3bn, but only after Orange received €4.5bn in net cash from the sale of EE to BT.

Posted by Martin Courtney at '08:57' - Tagged: results   OBS   H1  

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Wednesday 27 July 2016

Class act FDM just keeps getting classier

logoI really don’t know why it took me quite to so long to meet up with Rod Flavell, the dapper founding CEO of veteran IT staffing firm FDM Group, as I’ve been tracking the company since I first started working with Richard Holway back in 1997. But meet we did just a couple of weeks ago. And everything I saw and heard only served to boost my admiration for his pretty much unique ‘employed contractor’ model (they’re called ‘Mounties’ after FDM’s progenitor business, Mountfield Software). Flavell manages this business within an inch of its life and incredibly successfully so.

But let the numbers speak for themselves. Half-time revenues (to 30th June) grew by 16% (all organic) to £86.5m, with gross margins leaping from 38.6% to a truly stunning 45.9%. Operating margins gained 20bps to 17.9% despite a 56% increase in SG&A as Flavell ploughed significant additional investment into new training academies (yes, FDM trains its people within an inch of their lives too). These are Indian pure-play margins from an entirely onshore-based project services business.

FDM re-listed on the London Stock Exchange just over two years ago at 287p a share (see FDM Mounties remount to the Main Market). Its shares now sit at 565p. Class act.

Posted by Anthony Miller at '08:35' - Tagged: results   recruitment  

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Wednesday 27 July 2016

Unisys makes big swing into Q2 profitability

unisysSecond quarter results out overnight from Unisys are positive on both the revenue and profit fronts. The company achieved a commendable 6.6% operating margin – quite a transformation from the 6.5% decline of Q2 last year (which included a $53m charge for restructuring). The bottom line has been boosted by cost-cutting efforts during the year, but also a better contribution from high margin revenue.

Overall revenue dipped less than 1% (at constant currency) to $748.9.m, saved by strong revenue growth in the Technology business, and in particular from the company’s ClearPath Forward product line.

However, over in the Services business (which accounts for around 80% of revenue) the picture is not so pretty. Revenue declined 6.1% at constant currency, while the operating margin also declined and was all but flat (i.e. creeping towards a loss). Management says this was down to investments made to help the business “reach longer-term profitability goals”.

Unisys has some technology nuggets but its position as a provider of generic infrastructure services is putting a stranglehold on growth prospects. One of Peter Altabef’s (CEO) strategic aims is to provide “security in everything we do”, alongside improving the company’s vertically aligned approach to market. For example, the company has just launched its digital banking platform designed to enable financial institutions to provide more secure banking services. These are exactly the right moves to make. If you’re an IT services supplier that doesn’t have scale, you’ve got to differentiate strongly from the crowd. Unisys has some really interesting puzzle pieces, but too much of the overall picture is dominated by low growth/low margin business.

Posted by Kate Hanaghan at '08:27' - Tagged: results   security   infrastructureservices  

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Wednesday 27 July 2016

ARM as expected

ARMVery little to report on ARM’s Q2 as last week’s SoftBank deal (See Sadness as ARM falls to SoftBank) meant that no forward guidance could be given.

PBT grew 1% to £95.9m on revenues up 17% at £267.6m. Dividend to be boosted by 20%.

In normal circumstances, the ‘read across’ from Apple results (See Pleasant surprises from Apple) would have given reassurance to ARM’s investors. But ARM’s future is now more in the IoTs – and autoTech could figure strongly here – than in smartphones.

Personally I think the ARM board was wrong to sell out to SoftBank. ARM is a great UK tech company and I – for one – had every intention of backing it into the future.

Posted by Richard Holway at '07:54'

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Wednesday 27 July 2016

Organic growth eases as Sage parties in Chicago

logoSage CEO and chief showman Stephen Kelly sure knows how to throw a party. Today will be Day Three of the 2016 Sage Summit in Chicago, with an all-star cast helping him bang the drum. It rather reminds me of the once (and only once, thank goodness) I attended a marketing jamboree held by CA in New Orleans many years ago when (then) CEO Charles Wang literally burst onto stage riding a motorcycle (for reasons which escaped me then as now) and featured ex-US President Jimmy Carter as one of the keynote speakers. I must admit, I thought those sorts of circuses were well past their use-by dates, but there we go.

All this is prelude to Sage’s Q3 trading update which reported an easing of organic growth to 6.0%, compared to the 6.2% recorded at half-time (see Sage successfully hunting subscriptions in H1). Nonetheless, management ‘remains confident’ of reaching its 6.0% organic growth FY guidance, along with a 27% ‘organic’ operating margin. Management is not expecting a ‘material impact’ due to BREXIT – indeed, the fall in the pound will favour Sage, which generates almost 80% of its revenue from outside of the UK.

Meanwhile, back to the show, where ringmaster Kelly announced lots of new stuff yesterday in his ‘vision for the tech revolution’. I just never knew that accounting software could be this exciting.

Posted by Anthony Miller at '07:49' - Tagged: trading  

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Wednesday 27 July 2016

Atos raises full year expectations

Atos logoAtos’ H1 results are strong: revenue up 18% at constant exchange rates and up 1.7% organically (to €5,697m). Momentum seemed to continue into Q2 when organic growth stood at 1.8%. Operating profit also improved in H1, growing 23%, and pushing the margin up to 7.8%. The strong performance has given Atos cause to raise its expectations for the full year (for revenue, profit and free cash flow) – at the revenue level, organic growth is expected to be between 1.5% and 2.0% (vs. the 0.4% previously expected). Notably, the company believes it will see very little Brexit impact, “due to our low exposure to discretionary IT spending in financial services in the UK”. Time will tell, of course.

All service lines were in positive territory, albeit only marginally in the dominating parts of the business: managed services (+0.6%) and consulting & systems integration (+0.5%). The strongest growth area, though from a low base, was “big data & cyber security” (the closest that Atos gets to reporting on its ‘digital’ progress – see Measuring Digital Services), which grew revenues 12.8% to €302m; growth was in all geographies with particular strength in the public sector. Atos makes the comment that it is being successful in leveraging its position in Managed Services in order to cross-sell the skills and expertise of all service lines. Growth, it says, is being driven by both cloud migration projects and digital transformation projects.

In the UK, the H1 performance was impacted by the expected Q1 revenue dip (see Q116: Revenue dip as expected). As a result, UK&I was one of only two regions (the other being Benelux & the Nordics) to suffer a decline in the period – revenues fell 4.6% to €918m. The operating margin in the UK fell from 10.3% to 9.7%. However, improvement in Q2 is apparent – the decline in the last reported quarter was just 1.5%, or just €7m, to €471m. It looks like consulting and SI has picked up in UK&I – the global book to bill ratio of 106% in this area was put down to “several contract wins in UK & Ireland in particular”. Atos also renewed its large Personal Independence Payments (PIP) contract with DWP over the period, which will have positively impacted Managed Services. We will be speaking to UK CEO, Adrian Gregory, and will have more later…

Posted by Georgina O'Toole at '07:36' - Tagged: results   managedservices   SI  

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Wednesday 27 July 2016

Twitter disappoints...again

TwitterAs Apple pleased the market, so Twitter disappointed…again. So much so that Twitter stock sank 10% in after-hours trading. The problem is that user growth has ground to a halt – up just 3% in the latest quarter on top of an even lower 1% growth in the quarter before that. So, at 313m users, that’s a minuscule 9m extra in a whole year since CEO Jack Dorsey regained the reins. On the same measure 1.65b people sign into Facebook each month.

Twitter still has a tiny % of digital ad spend (c1.4% according to eMarketer). It seems to be having great difficulty in getting the all-important ‘engagement’ with users and therefore monetising its services.

At least Twitter managed to lower its losses to $107m from $136m last year. But, after all these years, it is depressing that Twitter is STILL loss-making at all!

I’ve expressed my own views on Twitter before. I think it is cluttered and difficult to use. Although I do use it for some tasks – and, indeed, TechMarketView has a loyal band of Twitter users -  I can’t remember seeing an ad or ,even less, engaging with one. The Facebook ad experience is quite, quite different. Also, whereas I use Facebook several times a day, I tend to turn to Twitter when an ‘event’ occurs – everything from a terrorist atrocity to broadband outage. I guess that’s why the outlook of £590-$610m for Q3 was so disappointing which in turn led to the stock ‘crash’.

If I was Dorsey, I’d be looking to do a LinkedIn right now…

Posted by Richard Holway at '06:40'

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Wednesday 27 July 2016

Pleasant surprise from Apple

AppleReports of Apple’s demise were proven wide of the mark tonight as Q3 results beat expectations and Apple stock immediately rose c7% in after-hours trading to over $103. The first time it’s been over $100 in a long while.

Revenues of $42.4b were better than expected - albeit down 14.6% yoy and the second quarter of revenue decline. Profits also declined from $10.7b to $7.8b yoy – but again better than expected. It was sales of 40.4m iPhones that really pleased the market. Looks like the iPhone SE was a real hit – but its lower selling price hit average unit prices. SE

Revenues from Apple Services rose 19% yoy to a massive $6b – or as CFO Luca Maestri said, ‘Services will be as big as Fortune 100 company next year’. We rather like services – particularly those involving recurring revenue like the iCloud, Apple Pay etc. The App Store grew revenues by 37% with particularly strong revenues from music subscription services. You can earn it whether you are using the latest – or an old - Apple device. So this big rock of revenue bodes well.

Although iPad unit sales declined from 10.9m to 9.95m, revenues grew by 7% to $4.88b thus demonstrating that users are going for the higher priced iPad models like the Pro. Mac units slipped 11% yoy and sales were down 13% yoy at $5.24b. I guess many a PC maker would probably think that was quite good!

The outlook for Q4 was also better than expected. Highly significant as it would cover the first weekend of iPhone7 sales in Sept. On the call, Apple said Q2 would be seen as the ‘low point’.

What Apple needs is a NBT. Clearly the Watch is not it. See Smartwatch market plummets. But continued leaked news about the Apple Car (or Apple’s entre into the autoTECH sector) continues to excite. The autoTECH market will be many times the size of the smartphone market and Apple really could rejuvenate itself here. Whether it does it alone or via a partner/acquisition is open to debate. With an ever growing cash hoard, Apple certainly has the means to buy anything that took its fancy.

Footnote – Apple was asked on the call about the UK (which is c5% of their global revenues) post BREXIT. “We have not seen any meaningful impact on our business in the UK’.

Declaration – I’ve been an Apple shareholder since 2004 and have no intention of selling.

Posted by Richard Holway at '06:27'

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Tuesday 26 July 2016

Openreach: the dance goes on

BT Openreach July 2016Telecoms watchdog Ofcom again fell short of forcing BT to split up, instead insisting that its Openreach network infrastructure division become a legally separate company within the BT Group.

BT agreed to the re-organisation of Openreach but not a full-blown separation. Instead the telco will appoint an Openreach Board featuring a majority of independent members in consultation with Ofcom to maintain greater autonomy, and add an obligation to serve all its customers equally to its Articles of Association.

That sounds like BT going through the motions to appease Ofcom whilst keeping Openreach very much under its wing and fighting a break-up of the BT Group. But equally, splitting up BT would be a long, messy process that would damage UK broadband infrastructure investment in the short-term.

Ofcom’s original proposal is unlikely to have satisfied rival broadband service providers that currently lease BT’s “last mile” DSL network to connect their own customers anyway. TalkTalk, Sky, Vodafone and others have long complained that BT has no incentive to deliver the speed of access and service levels they require. A report by the Culture, Media and Sport Select Committee criticised BT for under-investment in Openreach and poor service last week, though we suspect its publication was carefully timed to add to the pressure from Ofcom.

The fear for UK businesses, and broadband service providers, is that BT’s current three year, £6bn investment programme will focus on fibre and mobile networks at the expense of the existing DSL network and improving customer service.

In the year to March 2016 Openreach generated £2.7m of EBITDA and Operating Free Cash Flow of £1.4bn (after capex of £1.4bn). The true indication of BT Group’s commitment to an independent Openreach will be the extent to which Openreach is allowed to invest its own cash.

Posted by Martin Courtney at '09:42' - Tagged: broadband   openreach   ofcom  

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Tuesday 26 July 2016

Idox acquires social care player Open Objects

lInformation management provider Idox is making another acquisition, this time entering the social care and health space, acquiring Open Objects Software Ltd (Open Objects), for up to £5.2m (see Idox grows 26% in H1).

Open Objects adds last year’s acquisitions of Cloud Amber and Reading Room - and all part of CE Richard Kellett-Clarke’s ambition to turn Idox into a £100m business in the 'short term to medium term'.

Idox is paying 1.7x revenue for Cambridge-based Open Objects, which employs 36 staff, and generated revenue of £2.9m in the year ended 31 March 2016, and an operating margin of 22%. It specialises in the adult social care and family services space, where customers include ‘60% of the top tier local authorities in England’ including Manchester City Council, Kent County Council, Staffordshire County Council and LB Hackney.

Open Objects offers managed cloud services such as information, advice and guidance hubs, social care marketplaces, special educational needs hubs, online care assessments and practitioner portals. It also offers a self-serve information management platform called Atelus for the broader public sector.

Open Objects is cited as a competitor to one of Little British Battlers (LBBs), social care specialist Quickheart, who we assess in Little British Battlers – The Fifth Dimension. There are huge pressures on the NHS to reform; to react to increasing demands on the system as a result of a growing and aging population. TechMarketView subscribers can read our analysis of where we see the future opportunities in our report IoT and analytics opportunities in health and care.

Posted by John O'Brien at '09:15' - Tagged: acquisition   socialcare  

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Tuesday 26 July 2016

UK’s Big Data Partnership snapped up by Teradata

logoWhen we wrote last year about the new funding round for Silicon Roundabout-based data consultancy and training start-up, Big Data Partnership, we ended with the comment ‘Right time, right place’ (see Beringea goes bigger on Big Data Partnership).

Clearly Teradata, the US-based data warehousing giant, thought so too, as it has just acquired the company. Terms were not disclosed, though it is unlikely that the price paid would make a visible dent in Teradata’s near-billion-dollar cash pile, given that the startup had raised little over £4m since its founding in 2012. Teradata, currently nursing losses, had revenues last year of $2.5b, 7% lower than in 2014.

The acquisition raises questions on the future of London-based TechMarketView Little British Battler startup, Massive Analytic, which flagged Big Data Partnership as an R&D partner (see Massive Analytic: big data for mere mortals and Little British Battlers – The Third Wave). Earlier this year, Massive Analytic, founded in 2010, was one of the winners of the UK Ministry of Defence Growth Partnership Innovation Challenge, sharing a slice of a £2m ‘big data’ contract. By the end of 2013 the startup had raised some £600k in angel funding and grants, and we believe they undertook a further £1m+ funding round last year. One suspects approaches will be made...

Posted by Anthony Miller at '08:48' - Tagged: acquisition  

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Tuesday 26 July 2016

GB Group making good progress

gbgGB Group, the Identity data intelligence specialist, has appeared in HotViews recently with results showing organic revenues up 16% (see GB Group reaping rewards…) and its recent acquisition of IDscan Biometrics (see here).  And according to today’s AGM statement things are still going well.

Trading performance is meeting expectations, boosted by the growth vectors of rising cross-border e-commerce, increasing fraud and tougher compliance requirements. Two new contract wins, with Creditsafe (a supplier of company credit cards) and the new gambling venture fronted by the Sun newspaper, should also spur growth.

Last year, overall revenue growth totalled 28%, the additional 12%pts being supplied by acquisitions, principally the US-based Loqate business. Current year figures will be further embellished by IDscan, which although relatively small in revenue terms does offer good cross-sell opportunities. GBG remains on the hunt for further deals.

The key question of who will be CEO as Richard Law departs remains unanswered, but the company holds out the prospect of an end-September appointment. With rapid organic growth and the need to manage acquisitions, the sooner the better.

Posted by Peter Roe at '08:32' - Tagged: acquisition   compliance   regulation   identity  

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Tuesday 26 July 2016

NEW RESEARCH: BREXIT effect on UK tech stocks

picThe UK decision to leave the European Union added to the general volatility in the market and caused an immediate drop in stock values around the world. Most stocks quickly recovered, but with only a week before the end of the quarter, the differing speeds of recovery of some stocks led to a rather distorted view of the underlying performance.

In the latest edition of IndustryViews Quoted Sector, we look at the performance of key UK tech-related stocks during Q2 and contrast with leading European, US and Indian peers.

And as ever, there’s our ranking of the Top and Bottom Twenty UK software and IT services stocks, along with a summary of the ‘Dearly Departed’ who have exited the London markets and the Newly Arrived.

All this and more in six chart-packed pages can be yours – but only if you subscribe to the TechMarketView Foundation Service. Those that do can download IndustryViews Quoted Sector Q2 2016 here. Those that don’t should not tarry in contacting our Client Services team to find out more.

Posted by HotViews Editor at '07:47'

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Monday 25 July 2016

Pythagoras goes global with British Musuem

Pythagorus logoWe do love to hear of the successes of our previous Little British Battlers (LBB). This time it is Pythagoras (see Little British Battler Report – the Magnificent Seventh) that has come up trumps, announcing a partnership with the British Museum’s International Engagement team to deliver a new customer relationship management (CRM) system. The aim being to improve the Museum’s management and engagement with global partners on international projects.

The project involves the Museum’s first implementation of Microsoft Dynamics. Readers will remember that, as a Microsoft Gold Partner, Pythagoras’ raison d’être is enabling clients to maximise their investment in technology and Microsoft environments (see LBB Pythagoras Communications – delivering the Microsoft stack). When we met Pythagoras the company was growing strongly and it sounds like the success has continued. Other recent projects have been with Enfield Council and a “major northern university”.

Posted by Georgina O'Toole at '18:23' - Tagged: contract   lbb   crm   microsoft   littlebritishbattler  

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Monday 25 July 2016

NPS invests in Digital Case File solution

Northgate Public Services logoThe mission to ‘join up justice’ in the UK seems to be a hot topic of conversation at the moment, as pressure to improve the workings of our Courts system increases. Unfortunately, the action so far hasn’t really lived up to the rhetoric. However, Northgate Public Services is ensuring it has the solutions that will sit at the heart of the system… and perhaps start to accelerate progress if adopted. It has developed an end-to-end digital evidence solution, covering the period from initial investigation through to sentencing. The solution is called “CONNECT Digital Assets” and enables the user to build a multimedia Crown Prosecution Service case file from the array of media now available, including body-worn video and CCTV. It has partnered with Fotoware (for its Digital Asset Management Platform) and its partner, MediaLogix, to develop a solution ready for the UK market.

Northgate already has a strong footprint in criminal justice, earning estimated turnover of c£33m from the police sector alone last year. It has invested heavily in its integrated operational policing system (the Connect platform) (see Public Sector Opportunities Bulletin – June/July 2015) and has been one of the software partners on the Home Office Police National Database (PND) contract since its inception. Indeed, much of the company’s public sector success has been due to its investment in relevant and repeatable IP in its target sectors. This latest investment targets the requirement for police forces and prosecutors to prepare Digital Case Files as set out in the CJS Efficiency Programme; the programme has been working with police forces to help them develop the capability. We have already seen evidence of police forces investing in this area (see Public Sector Opportunities Bulletin – January 2015.

CONNECT Digital Assets can operate as a stand-alone system but, importantly, it can also integrate with operational policing systems (or with NPS’ Socrates Forensic Case Management System). The system will allow for simultaneous searches across a range of multimedia evidence based systems, including those focused on cybercrime or those capturing evidence from the public (e.g. via social media). We will follow its progress with interest.

Posted by Georgina O'Toole at '18:05' - Tagged: public+sector   product+announcement   police   justice  

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Monday 25 July 2016

Yahoo sold to Verizon for c$5b

YahooAfter all the rumour and anticipation, it was almost an anti-climax when it was announced that Verizon would buy the ‘core’ of Yahoo for c$5b. Just to be clear, the deal excludes Yahoo’s stake in Alibaba and Yahoo Japan – or indeed Yahoo’s cash and its non-core patents. Given that these bits are worth c$40b v Yahoo’s market cap on Friday of c$37.4b, it will be interesting to see where Yahoo shares open in the next hour.

No news yet on the fate of CEO Marissa Mayer – other than that she if she left it would be  with a severance payout of $57m. Talk about rewards for failure… My views on Mayer are well known so I will not repeat them here.

I guess it might make some sense as Verizon bought AOL for $4.4b last year although the old adage ‘Buying two turkeys does not an eagle make’ comes to mind. These are Yesterday’s Companies. I just cannot see how anyone is going to turn them around. AOL still make a lot of their revenues from subscribers who have never moved off dial-up internet access! Yahoo is great for News, Finance etc but has NEVER found a way of monetising it. Will Verizon fare any better? Or perhaps it just doesn’t care? OK, Verizon makes it dosh from comms – mobile in particular. But I am just as likely to rake up the minutes using Facebook – or Pokeman GO – than Yahoo.

Anyway, yet another dot.com high-flyer effectively bites the dust.

Update - I've just received the official Press Release. Mayer seems to think she is staying on! Uses such phrases as 'It's poetic to be joining forces with AOL and Verizon..." and "I couldn't be prouder of our achievements to date..". I am speechless!

Posted by Richard Holway at '13:12'

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Monday 25 July 2016

Civica adds SFW: boosts Whitehall digital business again

Civica logoCivica continues its pursuit of digital prowess in central government. First it was Web Technology Group (WTG – see Civica bags WTG for leg-up into Whitehall). Then it was IPL (see IPL part of digital solution for ambitious Civica). Now it has made its next move with the acquisition of SFW. SFW made revenues in FY16 (to end March) of £12.5m (up from £11.9m), so will significantly boost Civica’s central government business, which accounted for 10%, or £30m, of Civica's turnover in its FY16 (see Civica: planning for growth).

We have written previously about Woking-based SFW. It was one of the early winners under the UK Government’s G-Cloud framework (see UK Government G-Cloud: Meeting its objectives), predominantly for agile development services (in Lot 4: Specialist Cloud Services). Over 2015/16 the company underwent a “major transformation” to focus strategically on digital services in the public sector; this resulted in four core practices – customer relationship and case management; content and collaboration; digital engagement; and public sector cloud. Whitehall clients include the Home Office, Defra and DECC, as well as non-departmental public bodies such as the Environment Agency, Acas and the Electoral Commission. Also amongst its 70 clients are organisations in the local government and regulated markets.

Adding SFW’s capabilities in digital engagement, CRM-based applications and workforce collaboration means that almost a third of Civica’s 3,500 employees have specialist digital capability. Interestingly, SFW also boasts an offshore delivery centre in Vadodara, India (see How SMEs are playing the offshore game’); a platform that Civica states will be important in terms of supporting the development of a flexible “right-shoring model”. It doesn’t look like the model has always been successful for SFW. In FY15 (to end March), the company’s operating margin was just 0.5%. Enhanced project controls and a new financial reporting framework have since been implemented, leading SFW to significantly improve the margin to 6% in FY16. But it looks like an area which Civica will need to look at carefully. We know, though, that Civica is well-practiced at integrating acquisitions; it has had plenty of experience.

Posted by Georgina O'Toole at '09:55' - Tagged: public+sector   centralgovernment   acquisition   M&A   agile   digitalservices  

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Monday 25 July 2016

Gresham indicates a strong first half

gcIn March we wrote about Gresham Computing’s excellent performance throughout 2015, see here, where they launched a cloud-based, as-a-Service option for their Clareti transaction control and data integrity software (CTC) and announced 11 new customer wins.

Now the management team indicates that this strong progress has continued throughout the first half of 2016, with six new CTC customers added, three of whom are in the US. Overall group revenue growth is expected to be 10% over the first half of 2015. This does represent a slow-down from the 16% growth reported in 2015, but this will be largely due to the phasing of legacy contracts. CTC revenue growth remains very strong, up 44%, with recurring licence revenues up 47%, albeit showing a small decline on the 51% reported last year. The continued revenue growth and the shift away from project-based consultancy services should also enable an improvement in EBITDA margins.

In addition to new customer signings, we would also expect good news about greater share of wallet and additional benefit from focusing on customers in the capital markets and transaction banking sector.

The interim results are expected on August 24th.

Posted by Peter Roe at '09:52' - Tagged: cloud   software.  

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Monday 25 July 2016

Tungsten’s new management resets the outlook

logoRecently troubled Tungsten Corporation, the provider of e-invoicing, purchase order and financing services, announces its results for the year to end April 2016.

Revenue was up 16% to £26.1m and Adjusted EBITDA losses were cut by a quarter, to £18.7m. After tax losses however totalled £27.9m after a £6.8m write off after agreeing to sell off Tungsten Bank, bought in a soon-to-regretted deal in early 2015, see here. The sale should complete by the end of October, generating £30m cash and reducing costs by £2m p.a.

The new management is focusing on its core e-invoicing network business and driving its portfolio with services such as early payment financing and analytics. The strategy of focus and tighter cost management was implemented in the second half and management considers that through this, the rate of growth improved significantly and has established a good foundation for the current year.

The intention is to automate the end-to-end transaction process and thus assist the digitalisation of their customers. Some 34 buyers (from a total of 175) have renewed their contracts, with an average rate increase of 64% and 11 new buyers have been added, with the connected supplier network growing by 22k to 203k. Network invoicing value increased by 13% to £133bn.

Tungsten is operating in a very competitive market, but management appears to be focusing on the correct issues to create a more sustainable business, in terms of more efficient on-boarding, avoiding rate discounting and extending the services portfolio. However, the scale of profit improvement required is still daunting and £10m further investment will be needed to improve internal processes, new services and technology. Management expect of £12-14m loss for the current year, but look to reach EBITDA breakeven on a monthly basis during 2017.

Posted by Peter Roe at '09:49' - Tagged: payments   banks   e-commerce  

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Monday 25 July 2016

Proxama looks to its beacon network

logoAs Proxama holds its AGM today, its management will update shareholders on the expanding beacon network where it is focusing its attention and which it hopes will guide it to profitable growth.

Recent successes include the building out of the beacon network to Premiership football grounds and nearby watering-holes and across commuter and tourist hot-spots in London, adding 1,000 locations in a few weeks. In addition, Proxama is partnering with media companies to drive advertising campaigns and also to monetise the network more effectively by working with PubMatic.

The company’s plans to dispose of its payments business appear to be progressing, but it this taking time, see here. The plan is to transform the business by focusing on proximity marketing and to be trading cash positively by the end of 2017. The progress of the numerous partnerships, as well as getting usage numbers up across the beacon networks, will be fundamental to the successful realisation of this strategy.

Posted by Peter Roe at '09:46' - Tagged: network   retail   payments  

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Monday 25 July 2016

Mphasis emphasises profitability

logoIt appears that the sale to Blackstone of HPE’s ~60% controlling interest in Bangalore-based mid-tier offshore services firm, Mphasis, is not yet complete (see Blackstone gets go-ahead for Mphasis deal), but meanwhile there’s business to be done.

Perhaps not surprisingly, growth slammed to a halt, with headline revenues in Q1 (to 30th June) unchanged from the prior quarter at Rs15.17b (~$226m). However, Mphasis continued its operating margin march, which at 15.2% was 250bps higher yoy and 70bps up qoq. Also not surprising was the continued drift away from HPE’s customers, from whom Mphasis derived 23% of its revenues vs 29% 12 months prior.

The mid-tier Indian pure-plays are having rough time just now (e.g. see Margins squeezed again at Mindtree and Weak start to new FY for NIIT Technologies) so Blackstone will have a bit of a job on its hands kick-starting growth at its new ward. But with Blackstone’s deep pockets, one assumes that acquisitions will be on the agenda. There’s certainly many targets to choose from.

Posted by Anthony Miller at '08:44' - Tagged: results   offshore  

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Monday 25 July 2016

CityFibre caps encouraging H116

CityFibre caps encouraging H116AIM-listed network service provider CityFibre enjoyed strong momentum in the first half of the year. Its latest trading update estimates contract value totalled £53.8m in H116, up 664% from £8.1m in H15 and more than double the number for the whole of FY15.

CityFibre offers a mix of high speed fibre broadband services to both business and consumer customers in multiple UK cities - and 1Gbit/s links in Aberdeen Coventry, Edinburgh, Glasgow and York - where alternative fibre or xDSL links from rival providers are either slow or unavailable.

We would kill for bandwidth like that here at TechMarketView (if only we could get it) and it looks to us like CityFibre is doing a good job of both signing new customers and upselling extensions or upgrades to key existing accounts. An network connectivity contract with Serco in Peterborough was extended earlier this year; 109 schools and public sector sites were linked within its Capita IT Services agreement, and CityFibre also signed a  Master Services Agreement (MSA) with Level 3 Communications.

The company continues to expand its reach through service provider relationships and enlarge its fibre network footprint to open up sales opportunities in new UK cities. CityFibre has borrowed heavily to fund that expansion (£90m on the acquisition of KCOM Group assets alone) as it seeks to establish itself as a viable competitor to BT Openreach and Virgin Media.

If it continues on the current upward trajectory, we think CityFibre may even turn a profit this year after two years of consecutive losses since its IPO in 2013.

Posted by Martin Courtney at '08:30' - Tagged: network   tradingupdate   broadband   CityFibre  

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Monday 25 July 2016

Netdimensions slumps on revenue warnings

lNetDimensions shares have slumped by almost a quarter after warning on both first half and full year 2016 revenues.

Management of the performance, knowledge and learning management provider, said delays in deal roll outs meant revenue for the H1 period was broadly unchanged on H115, and this looks likely to continue into the second half of the year. This time last year, Netdimension achieved 16% revenue growth, and 12% in the full year (see Netdimensions solid in high consequence industries). So a rapid reversal in fortunes.

The company is wisely keeping a tight control on costs to weather this dowturn, with H1 EBITDA losses being trimmed to -$1m vs. -$1.8m last time. 

Posted by John O'Brien at '08:24' - Tagged: saas   update  

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Monday 25 July 2016

Are you ready to Surf the Waves of Disruption with us?

TMV logoWill you be joining us for drinks, dinner and a stimulating debate on the disruptive trends and suppliers shaping the UK software and IT services sector on September 8?

Our fourth annual ‘Evening with TechMarketView’, which is sponsored this year by NetSuite, will take place in London on Thursday 8 September 2016. If you'd like to join us there don't leave it too late - you can book by clicking here.

Following the success of the sell-out 2015 TechMarketView Presentation & Dinner, this year’s event will once again be held in the magnificent premises of the Royal Institute of British Architects (RIBA) in Portland Place, London, from 6.15pm.

Surfer

The evening, which will be centred around our 2016 research theme ‘Surfing the Waves of Disruption’, will commence with short, insightful presentations from the TechMarketView analyst team highlighting key trends in the UK software and IT services market. As in previous years there will also be a guest appearance from the CEO of a disruptive ‘Little British Battler’ company.

The formal part of the evening will be followed by ample time for networking over pre-dinner drinks, sponsored by Wells Fargo, and a sumptuous three course dinner with your peers.

We’re expecting a similar audience to the previous three years with around 250 ‘movers and shakers’ from the UK tech scene, for what has been described by previous C-level attendees as “the best networking event in the industry”.

TechMarketView Presentation & Dinner 2016

Venue: Royal Institute of British Architects (RIBA), Portland Place, London

Date & time: Thursday 8 September 2016, from 6.15pm

Ticket price: £395+VAT per person for TechMarketView research subscription clients and £495+VAT per person for everyone else.

There are also a few tables of ten still available at £3,950+VAT – ideal if you fancy bringing the team along or entertaining clients and prospects.

To secure your place, please click here to book or email tx2 Events who are organising the evening for us on eventenquiries@tx2events.com.

The TechMarketView Presentation & Dinner 2016 is proudly sponsored by:

NetSuite logo Wells Fargo logo

Posted by HotViews Editor at '08:00' - Tagged: event  

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Monday 25 July 2016

NEW RESEARCH: Measuring Digital Services

picHow much of your IT services business is ‘digital’? Twenty percent? More? Less? None? All? Don’t really know?

We’ve seen almost all these responses (unsurprisingly except ’None’!) in public statements made by some of the leading suppliers of IT services as they jockey for position in the digital services market.

The question is, what are they measuring and how?

TechMarketView Managing Partner, Anthony Miller takes a passing look at vendor claims for their digital businesses to see if we can divine any meaningful measures of digital services.

Subscribers to the TechMarketView Foundation Service can download Measuring Digital Services here. The otherwise unenlightened should drop an email to our Client Services team to find out more.

Posted by HotViews Editor at '07:32'

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Friday 22 July 2016

Vodafone reports Q1 trading update – in Euros

Vodafone reports Q1 trading update – in EurosVodafone issued its Q117 trading update calculated in Euros rather than pound sterling for the first time, a move which the company said better aligns with the geographic split of its Group operations.

It also leads TechMarketView to speculate whether Vodafone is indeed planning to shfit its operational base to the Eurozone at some point in the future, a strategy that UK executives refused to discount shortly after the Brexit vote.

We’re not quite sure how this helps Vodafone gloss over the numbers - reported Q117 Group revenue is estimated to have dipped 4.5% to €13.4bn yoy (though up 2.2% organically). Modest 1.2-1.6% organic growth in Germany, Spain and Italy was let down by the UK which reported a 3.2% yoy dip to €1.8bn.

Turnover from enterprise services specifically was up 2.2% organically to represent 28% of the overall Group total (€3.7bn). Moving businesses off traditional mobile voice and data connections into integrated voice/mobile/video services such as unified communications is helping here, as well migrating companies into cloud hosting environments and delivering the underlying IP-VPN links.

The Internet of Things (IoT) is another area of growth, with global IoT connections up 39% yoy and revenue growing 20%, though TechMarketView still estimates this side of the business represents only 1-2% of Vodafone’s total Group revenue at most.

TechMarketView will be keeping a close eye on IoT market and technology development as part of its new SecureConnectViews research stream. Vodafone is making ground in IoT, having signed an M2M connectivity deal with Philips earlier this year. Managed network services contracts with ScottishPower Energy Networks and EDF Energy present further opportunities to upsell IoT services, and like its rivals Vodafone will be keen to capitalise on utility sector demand.

Posted by Martin Courtney at '09:45' - Tagged: results   iot   Vodafone  

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Friday 22 July 2016

SCC partners with Little British Battler, mhub

sccSCC has announced it has entered into a partnering agreement with mhub, one of our Little British Battlers. mhub is a digital workplace app that brings all work applications together into a single mobile hub. SCC has itself been using mhub for two years, and mhubhas integrated it into its SCC Connect app. It uses mhub to deliver rich media internally – within teams and for internal marketing communications – and externally for communicating with customers and partners.

SCC will now resell mhub to customers, and indeed is due to complete its first implementation by the end of the year.  

We’re really proud of the progress we see many of our Little British Battler firms making. Indeed, several of them have gone on to be acquired – including C24 and Carrenza (both by Six Degrees), and CentraStage (by Autotask).

Posted by Kate Hanaghan at '09:44' - Tagged: partnership   mobile   digitalservices  

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Friday 22 July 2016

Bond intent on gradual dismemberment

logoRather like the Cheshire Cat in Lewis Carroll’s Alice in Wonderland, Bond International Software is attempting its own disappearing act leaving just a mischievous grin.

Having decided to throw in the towel earlier this year through a progressive series of divestments (see Bond starts divestments with sale of Strictly Education), management received an approach in June from Toronto-based ‘stealth’ software aggregator, Constellation Software, to buy the rest of the company at 105p per share. This was promptly rebuffed (see Bond International: spurns potential Constellation offer) for the usual reasons. Constellation firmed up the offer a couple of weeks later (see Constellation formalises bid for Bond).

But today Bond management announced it has decided to proceed apace with its disappearing act, agreeing to sell its payroll subsidiaries, Bond HR and Payroll Software, Bond Payroll Services and Eurowage (trades as FMP Europe), to FMP Global Bidco Limited, an acquisition vehicle controlled by London-based Tenzing Private Equity, for £27.4m net cash plus the assumption of £2m debt. The subsidiaries had aggregate revenues of just under £12m last year, with £3.7m pre-tax profit.

Should this deal proceed, all that would be left of Bond would be its legacy recruitment software operations and various tangible and financial assets, so management warned that Constellation may then let its offer lapse. Constellation’s offer valued Bond at £44.2m. With the Tenzing bid worth £29.4m, management is taking a punt that they can get £15m+ for the recruitment software business, which generated pre-tax losses of £3.5m last year on revenues of £17.8m. Investors think they can, and have pushed Bond’s shares up 9% this morning to 112p.

Let’s see if they got it right.

Posted by Anthony Miller at '09:14' - Tagged: acquisition   disposal  

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Friday 22 July 2016

Workday brings data discovery youngster Platfora into the fold

LogoIn a move that will bring richer capability to its financial management application, Workday is acquiring Platfora, a four-year old start-up specialising in data discovery. Its product will be folded into the Workday offering to enhance analytics capability, especially in the areas of managerial reporting and operational analytics. One of the other benefits is that as Platfora can hook into Hadoop data stores it can work on data drawn from multiple sources.

Platfora is estimated to have raised $95m and customers include Disney, AutoTrader and TiVo. Terms of the deal were not disclosed. Its acquisition will intensify the scrutiny of competitors such as Datameer, Birst and Clearstory Data.

For Workday, it is the latest in a series of tuck-in applications that continually enhance its capabilities and have included online learning platform Zaption and the MediaCore video platform. And don’t forget it has its machine learning venture fund (see here) which should provide a feeding ground for future acquisitions.

Posted by Angela Eager at '09:04' - Tagged: acquisition   saas   cloud   software   bigdataanalytics  

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Friday 22 July 2016

Escher looking fresh in H1

LogoA solid trading update from Escher Group points to a 4% yoy revenue uplift in H1 to an expected $12.3m, (equaling the full year increase shown in 2015), but a significant 25% increase in adjusted EBITDA to c$3.4m.

The bottom line improvement is largely down to a recent win with Vietnam Post, plus increases in maintenance and support revenue. That’s all to the good and demonstrates the widening appeal of the provider of outsourced point-of-service software for postal, retail and financial industries as it modernises it business model (annuity revenue) and products (‘digital’ RiposteTrEX.) It also highlights the extent to which single deals can impact results. As we have noted previously, Escher is overly reliant on a small number of customers (two customers represented 43% of revenue in FY15 although that was down from 48% in the previous year). However, it seems to be trending the right way with new customer wins and annuity revenues are starting to flow through, which also enabled it to keep net debt flat at $2.7m.

Posted by Angela Eager at '08:30' - Tagged: software   tradingupdate  

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Friday 22 July 2016

NEW RESEARCH: IndustryViews Corporate Activity – Q2 2016

logoTechMarketView Foundation Service subscription clients can download the latest edition of IndustryViews Corporate Activity, our quarterly summary of significant trade sales and private equity investment in the UK software and IT services market, by clicking here.

Please contact sales@techmarketview.com if you would like further information on how to subscribe.

Posted by HotViews Editor at '08:09' - Tagged: acquisition  

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Friday 22 July 2016

Tesla's Master Plan Part Deux

TMuskI am pretty sure that autoTECH is going to be the NBT. I’m also pretty sure that Elon Musk is one of the most significant visionaries around today. So Musk’s ‘Master Plan, Part Deux’ for Tesla is important.

Musk’s plans (they are not just visions…) include:

- fleets of driverless taxis which could include your own Tesla car when you are not using it

- No new lower priced Tesla cars were planned but a Tesla SUV and pickup truck were envisaged based on the Model 3 floorplan.

- a bus/mini bus

- a variation on the lorry called a Tesla Semi.

- a ‘smoothly integrated and beautiful solar-roof-with-battery product just works’. This was part of his justification for the controversial purchase by Tesla of SolarCity.

- turning the ‘machine that makes the machine itself into a product’ ie making the Tesla car factory into a product.

Musk’s 'Master Plan, Part Un' for Tesla was released in 2006. It has largely been achieved albeit both late and over budget. But that still means you should take Musk seriously. He has shown that he can turn dreams into reality – as anyone who has watched a Falcon9 SpaceX rocket return to land vertically after putting a satellite into orbit will know.

Also, for all the doomsayers, remember that if your identification of a real market is correct, in time advances in technology and volume production will almost certainly make it possible and affordable. Musk talks of Part Deux by the early 2020s. History shows it will take longer. But by the 2030s, Musk’s current dream will probably be reality. We’ll have had Part Trois et Quatre by then too...

Posted by Richard Holway at '08:04'

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Thursday 21 July 2016

Smartwatch market plummets

WatchIDC has reported that the global smartwatch market plunged 32% in Q2 yoy. Apple saw a 55% decline yoy as both Samsung and Lenovo took market share.

Long time readers know that I was bullish about the wearables market. But the Apple Watch has failed to live up to expectations. A whole range of issues have bugged it. I foresaw a device with multiple sensors on the back allowing third party suppliers to create loads of different Apps. But the available sensors are so far very limited. Indeed, often you would be better off with a cheaper/slimmer device that did just one dedicated task.

Ultimately this will change. I do still foresee a time when everyone – maybe every animal too – will be fitted with such a device. I saw healthcare – particularly amongst the elderly – as a massive opportunity. I still do. But clearly this is all going to take a lot longer than even I anticipated.

Posted by Richard Holway at '21:47'

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Thursday 21 July 2016

Mike Tobin - 7 down/33 to go...

TobinI guess that by the time you read this, Mike Tobin will have finished his first week running a Marathon a day for the Prince’s Trust. I couldn’t manage one - let alone seven. But Mike is committed to doing 40 in 40 days! WOW!

Mike tells me that he starts at 5.00am everyday and that he is now completing the 26+ miles in <5 hours. He says he felt like giving up on Day 3…but didn’t!

Look, I know I said he was ‘mad’ – and still think he is. But I really do take my hat off to this guy. Both for the sheer stamina of the physical achievement AND for the funds that Mike is raising for the Prince’s Trust. The Trust is a cause close to both our hearts. So, why don’t you support Mike on his way by donating here or text your donation and TOBI52 to 70070. YOU can make a difference to another young life.

Posted by Richard Holway at '21:35'

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Thursday 21 July 2016

Sopra Steria dons its kilt again!

Sopra Steria logoSopra Steria has once again drawn in its tartan credentials (see Sopra Steria win shines light on tartan credentials) to secure new business with North Ayrshire Council, Scotland. Sopra Steria will be working with the council on its digital transformation programme, helping the organisation to adopt new, agile ways or working. It is in the process of scoping two Proof of Concept projects; one will focus on uncovering new ways of working to deliver Revenue & Benefits transactional services, the other is an Integrated Mobile Working Pilot.

As well as highlighting Sopra Steria’s experience of working with the Scottish Public Sector, the council also pointed to its supplier’s understanding of digital transformation, for example at NHS Scotland, where it works alongside Atos and IBM to deliver e-health solutions. North Ayrshire’s PoC projects are described as “people first, technology second”.

The win is an interesting one for Sopra Steria, as it looks like a small deal which, if successful, could lead to bigger opportunities. Moreover, as we have highlighted previously, this way of working – working alongside the client rather than taking an outsourced approach – is becoming far more popular across UK local government (see UK public sector SITS market trends & forecasts).

Posted by Georgina O'Toole at '12:49' - Tagged: public+sector   localgovernment   contract   scotland   digitaltransformation  

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Thursday 21 July 2016

Claranet buys Surrey-based Ardenta

claraManaged services and hosting firm, Claranet, has acquired Ardenta for an undisclosed sum.

Ardenta is based out of Sunbury-on-Thames and its focus is the management of e-commerce systems, with particular expertise in high-volume transactional database management. The company has annualised revenue of £6m, with customers including the BBC, ITV, Ladbrokes and William Hill.ardenta

The deal comes shortly after Claranet’s acquisition of Diademys in France, and Warrington-based Bashton Limited.

Claranet has been investing to build its capability to provide managed services over traditional and cloud platforms. Some of the acquisitions might be fairly small, but they add important pieces of capability. Mid-market customers, just like the corporate end of the market, increasingly want choice in terms of how infrastructure is delivered. To that end it is very important that suppliers both broaden and deepen their capabilities to serve this need.

The Claranet Group (which operates across UK, France, Germany, the Netherlands, Spain and Portugal) now has annualised revenue of £200m and c1200 staff. We estimate that around half of revenue is derived from the UK market.

Posted by Kate Hanaghan at '09:43' - Tagged: acquisition   cloud   managedservices   hosting  

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Thursday 21 July 2016

IFS solid in Q2

LogoQ2 results from ERP provider IFS shed interesting light on the dynamics of the company and the broader market with a geographic division between maintenance and licence growth.

The vertically focused company has gathered up new customers and increased business from its existing base. As a result, licence revenue was up 10% currency adjusted (all figures referenced are currency adjusted) in the quarter to June 30, reversing an 8% decline in Q1; most of the growth came from Europe Central, Europe East and Africa, Asia and Pacific. Maintenance revenue also increased, by 9%, but here the growth was driven by Europe North, Europe Central and Europe West. The 10% lift in consulting revenue (substantially delivered by partners following work to build the partner ecosystem) was driven by Europe North, West and Central. This reflects relative maturity and the IFS footprint and is also an indicator of where future growth is likely to come from.

In total revenue was up 11% to SKr 923m in Q2 with adjusted EBITDA of SKr 118m vs. SKr 96m; strip out the impact of the VisionWaves and MainIoT acquisitions and revenue was still up a respectable up 8%.

Across the first six months, revenue growth was up 9% to SKr 1734m, with adjusted EBITDA of SKr174m vs. SKr 159m, highlighting better performance in Q2.

IFS received PE investment EQT VII at the end of 2015 (see here) where the plan was to stimulate higher growth by investing to boost sales and marketing, product and channel development. The benefits of additional resources look like they are becoming apparent. As we have highlighted previously, with organisations reassessing their ERP suppliers in the light of cloud developments, this is the time for challenger suppliers to make their mark and grow their customer base.

Posted by Angela Eager at '09:32' - Tagged: results   erp   software  

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Thursday 21 July 2016

Osirium H1 hiatus, but sales up 45%

lOne of the big expectations from Osirium’s IPO in April was for strong growth from the cyber security minnow, as it benefits from its specialism in privileged access management (see Cyber security player Osirium IPOs).

There has however been a hiatus in H116 as Osirium more or less exited professional services, and became a pure SaaS business. Revenues for the six months to 30 April actually fell 7.4% to £162k, and operating losses got worse at -£513k vs. -£368k last time. The bottom line is expected, as Osirium invests more in its products, marketing and account management to scale the business and stay ahead of the competition.

If it is to scale, Osirium has to be about growth right now. The SaaS numbers are the key indicators here. In H1, SaaS revenues were up modestly by 6% to £158k (now 98% of revenues). However, looking ahead, invoiced sales are up an impressive 45% to £206k, so this bodes very well going forwards. We would expect Osirium to return to growth through the remainder of 2016.

Last year headline revenues grew 40%. Osirium is not likely to achieve this in 2016 at current course and speed. But with just shy of £5m from the IPO in the bank, it has plenty of resources to invest in products and marketing and to accelerate its momentum with channel service partners like Atos, Xchanging, a CSC company and Xerox. These and other partners will be increasingly important to drive sales opportunities and support clients in consultancy and change management. A new alliance partnership with US-based identity governance specialist SailPoint is another important move, working with complementary software vendors.

Posted by John O'Brien at '09:01' - Tagged: saas   cybersecurity  

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Thursday 21 July 2016

Monitise uphill struggle to recovery

logoThe difficulty of the mountain that troubled and transformed fintech company Monitise has to climb is highlighted again in today’s year-end trading update, which warned that next year’s revenue will be lower than this year’s as contracts for its flagship product take longer to conclude.

We have long waxed lyrical on former tech sector darling Monitise’s trials and tribulations (start with Monitise and the long hard road to recovery and work back). It’s still a race against time.

Posted by Anthony Miller at '08:53' - Tagged: trading   warning  

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Thursday 21 July 2016

OBS expands DaaS portfolio with Log’In Consultants acquisition

OBS expands DaaS portfolio with Log’In Consultants acquisitionOrange Business Services (OBS) boosted its cloud service capabilities with the acquisition of Log’in Consultants, a European company specialising in the provision of online desktop, desktop as a service (DaaS) and virtual desktop infrastructure (VDI) services.

OBS highlighted growing demand for business transformation centred on the connected workspace amongst multinationals as a driver for the acquisition, terms of which were not disclosed.

TechMarketView expects an increasing number of organisations to seek on-demand access to cloud based applications and services from multiple devices, including desktop PCs, tablets and smartphones over the next few years (subscribers can download our report The Connected Workplace: Enabling an experience beyond expectations here).

Log’in Consultants’ existing customer base sits in Belgium, Germany and the Netherlands however and OBS faces considerable competition for multinational customers with UK offices. Other network service providers delivering remote access and online desktop services to UK companies include BT and Alternative Networks, whilst Indian infrastructure services supplier HCL paid £8m to acquire two UK desktop virtualisation service companies earlier this year.

We think that the main source of revenue for OBS (the business services division of French telco Orange) is still core network and telecommunications connectivity, with recent customer wins including German-headquartered chemical, pharmaceutical and life sciences multinational Merck.

The Log’in acquisition brings more than just a DaaS service proposition to OBS, adding consultancy and infrastructure management expertise along with 135 staff. Those cloud service integration and management capabilities will prove important to OBS if it is to shift more revenue away from networking connectivity and into managed services going forward.

Posted by Martin Courtney at '08:50' - Tagged: acquisition   desktopservices   Orange   log'in  

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Thursday 21 July 2016

Rocket boosts homecare startup HomeTouch

logoLondon-based startup HomeTouch is another among myriad consumer services marketplaces but arguably in one of the most sensitive areas – home-based personal care of the elderly and infirm.

HomeTouch links self-employed care workers with people requiring home care. Founded in 2011 by former NHS dementia physician-turned-SaaS entrepreneur Dr Jamie Wilson, HomeTouch launched in 2015 on the back of a mooted £400k seed funding round led by Passion Capital. The startup has just raised a further £700k led by Global Founders Capital, the venture arm of Rocket Internet, along with Passion Capital. This brings the total raised by HomeTouch so far to £1.75m

HomeTouch stresses the vetting process, including face-to-face interviews, that care workers must go through before they can register on its marketplace. Care workers set their own daily rates and HomeTouch takes 20% commission. Clients pay up front, with funds held in escrow until the contracted service is complete (or at the end of the month).

While there will be those who will prefer to hire care workers through traditional home care agencies, there will be others who are prepared to take on greater responsibility for care worker selection for whom an internet-based personal care marketplace will work very well. There is of a course a huge trust element involved – including the temptation for clients to pay care workers ‘cash in hand’ (obviously against HomeTouch’s T&Cs) – but that’s just one of the challenges of running a personal services marketplace.

Perhaps a bigger challenge for HomeTouch will be scaling up the vetting process in line with potential demand. At the moment they appear to be just a five-person team, and £700k may not go that far.

Posted by Anthony Miller at '08:32' - Tagged: funding   startup  

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Wednesday 20 July 2016

NPS and HISL win Scottish screening deal

NPS logoNorthgate Public Services (NPS) and its partner Health Information Systems UK (HISL) are celebrating a new £2.25m/5-year contract to provide a diabetic eye screening system in Scotland. The managed service contract with NHS Scotland is for a single national diabetic retinopathy eye screening IT system to support the annual retinal screening of over 300,000 people with diabetes. Although it’s a national system, Vector, which is provided by HISL but hosted by NPS, can be tailored by each of Scotland’s 14 Health Boards to meet the needs of their population. The contract is due to start in 2017 and the system is designed to cope with Scotland’s future screening needs – staggeringly the number of diabetics in the country is expected to grow by 50% by 2035.

The contract is relatively small in monetary terms but it’s an important win for NPS. The public-sector focused supplier is best known for its local government presence but it has successfully made a niche for itself in the UK healthcare SITS market, with a specialism in preventative care and national registries. NPS runs a number of screening programmes for the NHS and HSE, including the Baby Hearing Screening programme in the UK & in Ireland, and has an innovative contract with the National Joint Registry. Northgate sees plenty of opportunity to grow its healthcare business further in this niche as the government looks to extend its screening programmes, including in diabetic retinopathy. This goal will bring it further into competition with the likes of EMIS, which also sees diabetic screening as an area of opportunity and has had success winning similar deals in England recently following its acquisition of specialist Medical Imaging in 2014 (see here and here).

As a slight aside, Scotland seems to be leading the way with innovations in this area. Back in 2009 NHS Scotland rolled out an automated grading system which helped to analyse retinal eye images, and in 2014 they turned to a Robotic Process Automation (RPA) system from Genfour to help increase throughput and efficiencies. The contract that NPS has secured therefore requires the transfer of around 10 years of data from existing systems and integration with the auto grading software.

Posted by Tola Sargeant at '16:36' - Tagged: health   software   RPA  

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Wednesday 20 July 2016

Cloud progress at SAP in Q2

LogoFlash thoughts on SAP’s Q2 results (to June 30) show that like Microsoft who reported its Q4 results last night (see here), its cloud business had a good quarter. The overall business was strong too, especially compared to its weak Q1.

Cloud revenue was up a reassuring 30%, albeit only to €720m on total revenue that was up 5% to €5.2bn. Software licenses had a bumper period, up 10% to €3.6bn. Against that background, the company reiterated its full year outlook. Operating profit soared 81% to €1.3bn, or €813m vs. €469m on a profit before tax basis, because it did not have the drag of restructuring costs.  

Most encouraging of all, it added 500 S/4HANA customers, of which 40% were new customers to SAP, which is testament to it expanding its addressable market.

And on the Brexit question – no impact on SAP’s business in Q2 (although there was only a short period between the vote and the end of the quarter), and no tales of customers radically adjusting their strategies according to chief executive Bill McDermott. The UK saw double digit growth in Q2 he indicated.

Posted by Angela Eager at '09:29' - Tagged: results   cloud   software  

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Wednesday 20 July 2016

EMC Q2 revenue declines; Dell merger approved

emcQ2 results out today from EMC coincide with the announcement that shareholders have approved its merger with Dell. Revenue (non-GAAP) was down 1% year-on-year at $6bn, but EPS was up 5%. Elsewhere in the EMC 'federation', VMware revenue was up 6% (see VMware tweaks the margin upwards) while Pivotal revenue increased 49%.

Following the Dell merger, the new entity will be known as Dell Technologies, with the enterprise business branded “Dell EMC”. Regulatory approval in China is still outstanding.

Dell has taken substantial steps to fund the merger including the sale of what was its services business (the Perot acquisition), the flotation of the SecureWorks business, and the sell-off of its software division to Private Equity. We’ve been conservative in our analysis of the potential of the merged firms, and certainly the task to bring them together will be signfiicant, and a big distraction for staff at all levels.

Posted by Kate Hanaghan at '09:19' - Tagged: results   merger   storage   hardware   PCs  

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Wednesday 20 July 2016

Accenture Digital buys in MOBGEN development expertise

Accenture Digital buys in MOBGEN development expertiseAccenture Digital’s acquisition of mobile app development start-up MOBGEN brings more mobile integration, analytics and Internet of Things (IoT) capabilities to the company’s ranks.

Based in the Netherlands with offices in Spain, MOBGEN describes itself as an end to end digital services company. Most of its 160 staff are involved in developing mobile apps with a strong focus on user experience and integration with existing systems.

We feel that MOBGEN has done little with IoT to date, but Accenture Digital expects IoT expansion to drive demand for mobility platforms, services and applications elsewhere. And it sees MOBGEN as a development engine for the requisite back end system integration needed to drive a new generation of connected users, personalised services and devices.

Combining analytics and IoT into managed services offers a wealth of potential for UK suppliers in various industry verticals, with healthcare representing a significant opportunity.

Accenture Digital is one of five business segments in the Accenture group, responsible for interactive services, customer experience, analytics and mobility (subscribers can access TechMarketView’s appraisal of Accenture’s digital strategy here).

On that basis, we think the MOBGEN acquisition (terms of which were not disclosed) looks like a good fit for the Accenture Digital portfolio. Bringing 160 mobile developers into the fold also significantly boosts its product and service innovation capabilities, with Accenture executives having previously emphasised the value of intellectual property as a commercial differentiator.

Posted by Martin Courtney at '09:09' - Tagged: mobile   digital   iot   MOBGEN   development  

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Wednesday 20 July 2016

Business headed the right way in Q4 for Microsoft

Logo“This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations,” noted CEO Satya Nadella as Microsoft released its results for Q4 and the full year (to June 30).

Those results were positively received, particularly as Q4 profit exceeded expectations – operating profit of $3.1bn vs. a loss of $2.1bn in the year ago quarter (due to the massive $8.4bn Nokia write down and restructuring). Revenue was down 7% to $20.6bn but included $2bn Windows 10 revenue deferral. Coming after Q3 in which it missed profit targets and reported slower cloud growth, Q4 was a definite improvement.

The question of course is how its cloud transformation is going and there are positive markers but few hard numbers. The Intelligent Cloud division saw a 7% lift in revenue (10% cc) to $6.7bn which is fair progress but it includes on-premise server product revenue (up 5%/8% cc) as well as Azure revenue. However, Azure revenue was up 102% so it is growing fast from its unknown base. Better still usage had more than doubled which indicates customers are using their Azure credits. This is good for Microsoft and will help make the case for the developers the company is working to attract to the platform.

Productivity and Business Processes saw a 5% (6% cc) revenue uplift, with consumer products doing particularly well, but Dynamics and Cloud Services saw a 6% (7% cc) improvement.

For the full year revenue was $85.3bn (again impacted by Windows 10 deferral), compared to $93.6bn, with operating profit of $20.2bn vs. $18.2bn.

Transitions are rarely linear and Microsoft demonstrates this; Q4 was an upbeat period. There will no doubt be trials to come, especially as problems with the smartphone business means it will not make its target of having Windows 10 running on 1bn+ devices by 2018; the current count is c350m. But as Windows 10 moves to payment mode as the free upgrade offer comes to a close, and news of its shift to a subscription base comes through, there are other initiatives for it to play to.

Posted by Angela Eager at '08:55' - Tagged: results   cloud   software  

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Wednesday 20 July 2016

Eckoh buys K2C to boost omni-channel capability

logoThe progress that Eckoh has made since its move to enable contact centres to provide secure payments was clearly illustrated in the excellent full year results, published last month. The decision, announced today, to acquire Klick2Contact EU Ltd (“K2C”) shows that the management is keen to take advantage of its leading position in this market area and deepen relationships with its growing list of customers.

When we spoke with the CEO at the time of the results, he repeated his intention to provide solutions co-ordinate customer contact over multiple channels. Today's acquisition is a major step forward. K2C brings with it expertise in live web help and omni-channel customer engagement services, such as web-chat, social media monitoring, workflow and email management, complementing Eckoh’s existing portfolio and product road-map. K2C is a five-year old company and has customers in 15 countries although 2015 revenue was only £881k, with EBITDA of £219k. K2C also works with Capita, a major partner for Eckoh in the UK. Eckoh will pay an initial £2.35m, with the prospect of further payouts of £5.65m if the K2C business delivers £2m EBITDA over the next two years.

Eckoh is positioning itself as a one-stop-shop for companies as they interface with their end-customers via mobile, online and social media as well as through conventional call centres. The differentiation provided by Eckoh’s CallGuard payments solution (see Eckoh patents its “garlic”), its growing customer list in the UK and US and the broadening service portfolio should ensure that the company’s momentum is maintained.

Posted by Peter Roe at '08:10' - Tagged: mobile   social+media   contactcentre   payments  

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Wednesday 20 July 2016

Those IMF growth forecasts

IMFThe cuts in the IMF’s economic growth forecasts post BREXIT were headline news yesterday. They cut their forecast for growth in the UK in 2017 from 2.2% to 1.3%.

What I found surprising – and received rather less coverage – was that they cut growth in almost every other market too. The nett result is that the UK still has the highest growth of any G7 nation bar the US (growth 2.5% in 2017). The UK (1.3% growth in 2017) will still perform better than Germany & France (both 1.2% growth).

Although I was a Remainer, I do find these figures quite encouraging. Firstly they should be a wakeup call to the rest of the EU that they could well suffer worse than the UK if they don’t enter into the BREXIT negotiations in the right spirit. Secondly, it rather demonstrated that growth in the EU was pretty dire anyway and that, as the UK had already determined, our future lies in markets outside of the EU – like US, India, China etc. We had already been increasing our exports to those countries much, much faster than to the EU.

The real fear is that the whole world goes into recession. BREXIT might have some part to play in that but I can’t believe it would be the major cause. If that was true, then again it is in the interests of the EU itself - and maybe the world - that the UK gets a good trade deal.

Posted by Richard Holway at '07:54'

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