Servelec has released its first set of full year results since separating from its Singaporean parent of 13 years and joining the main market of the London Stock Exchange in December last year (see Servelec joins the Main party). The results are in line with expectations at the IPO and January’s trading update (see Servelec serves up positive update), showing top line revenue growth for FY13 of 7% to £42m but static pre-tax profits of £10.9m.
Beneath the covers the picture is somewhat more complicated. As we’ve said before, Servelec is very much a business of two halves. The Servelec Healthcare division is best known for its RiO patient record system in the UK mental and community health sector. Whilst Servelec Automation provides complex, mission-critical control systems to blue-chip companies mainly in the UK oil & gas, nuclear, utility and broadcast sectors.
Servelec Healthcare is feeling the effects of the slowdown in the erstwhile National Programme for IT in the NHS (NPfIT). Servelec has been implementing RiO in London and the South of England via BT under the programme and sees its NPfIT contracts come to an end in October 2015. As a result, revenue from the healthcare business declined by 11% to £14.9m in FY13 (FY12: £16.7m) with adjusted operating profits dipping by 13% to £7.6m. Servelec faces mounting competition in its core healthcare market as its installed base of RiO customers come back to market. But early indications bode well for it retaining many existing clients and winning business in other areas of the UK as NPfIT winds down.
Unlike the healthcare business, Servelec Automation is growing strongly. Overall its revenue increased by 20% (not all organic) to £27.1m (FY12: £22.6m). However, Automation is also a business of two parts and it’s the Technologies part of the business which is growing. Technologies, which is focused on telemetry monitoring, saw revenue increase by 87% (21% organically) to £11.8m accompanied by a 70% increase in operating profit to £2.3m. The Controls part of the business, which operates in mature and competitive markets, reported a 6% decline in revenue to £15.3m but a 16% increase in operating profits to £3.6m.
After the challenge of an IPO in 2013, 2014 promises a management focus on organic growth across both Healthcare and Automation, as well as a search for potential acquisitions.
Posted by Tola Sargeant at '10:07'
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After a year of progress, see here and work back, AIM-listed StatPro, the portfolio analysis services provider, published full-year results with revenue growing 2% to £32.5m and pre-tax profit falling to £3.1m. EBITDA was down 19% to £5.5 million. StatPro’s strategy is to transform its business to cloud and benefit from three fundamental customer needs within the sector; lower cost solutions with costs related to activity, more agile, up-to-date technology to improve services to end users and reduced in-house IT and consequent complexity.
Sales of the cloud product (StatPro Revolution) more than doubled to £3.2 million, and cloud-related revenue (total revenue from customers who buy Revolution) now represents 37% of group recurring revenue and the number of fund administrator distribution partners advanced by 50% to total 34.
Looking ahead, we anticipate further increases in both sales and marketing costs and R&D, but with significant profitability gains as the company’s scale increases. The cloud-based replacement for the company’s largest product, StatPro Seven, will be launched throughout 2014. We would also expect increased penetration of the cloud products into existing customers and this will be a key driver of EBITDA and eventual success, particularly with respect to the larger global customers.
StatPro can now use its proven product to build market position and develop new segments (such as in private wealth management). This is now a balancing act between land grab and profitability and between the growth of new products and the decay of the old. EBITDA forecasts for the current year are under pressure, illustrating the scale of the problem. Management remain convinced that they have sufficient funding and expressed that confidence with a small dividend increase. On our part we continue to believe that StatPro’s execution and strategy is sound, but there is still a long way to go.
Posted by Peter Roe at '09:56'
Phoenix has named Stephen Vaughan as its new CEO with immediate effect. Executive Chairman, Peter Bertram (who has been leading the firm in the absence of a CEO), will resume his previous role of Non-Executive Chairman from 1 April 2014. Phoenix has also announced its intention to raise c£8.6m through a share placing to accelerate debt reduction and support the balance sheet.
Phoenix has been without a CEO since David Courtley left in 2012 (see Courtley (and Deloitte) exit Phoenix). It’s been a challenging period and half-year results announced last November show the pressure remains on both profit and revenue (see Tough times for Phoenix in H1).
Against this backdrop, it is easy to forget how strong the Phoenix brand once was as an IT support provider focused on a partner-only model. However, things have changed and pressure on pricing in particular (driven by partners and competitors) has made this a very tough market indeed.
Vaughan joins with significant and very relevant experience. He turned Synstar into a highly valued IT services company - tripling the share price when it was bought by HP in early 2005. He’s also had other leadership roles at Communisis and Charteris. Vaughan’s time at Synstar in particular (which, like Phoenix, provided support and recovery services), combined with his turnaround experience, all bodes well. However, we have to remain realistic about what is possible in today’s low/no-growth recovery/IT support markets; perhaps Vaughan will look to sell off parts of the firm to bring back its focus.
We hope to catch up with Vaughan in due course to understand more about his specific plans, and for the time being will avoid any clichés about Phoenix “rising from the ashes”!
Posted by Kate Hanaghan at '09:55'
12th March 1989 is generally accepted as the day that (now Sir) Tim Berners-Lee ‘invented’ the world-wide web whilst working at CERN. So today the media is full of retrospectives …and some future gazing too.
I was asked to contribute towards Nominet’s book The Story of the Web authored by ‘veteran’ IT journal Jack Schofield (the Guardian’s Computer Editor for some 25 years) I really do commend you to read it (follow the link). It is really good! Or look at the interactive timeline Click here. BTW – all put together by our friends at Brands2Life.
My contribution was printed as follows;
“The internet is essential but is still not available or used by about 10% of the UK population and much more in developing countries. It is such a shame that some old people have not embraced it, as it would make a great difference to their lives. So I’d make ICT skills as essential as the 3Rs at school and I’d make sure that every person, however young or old, had internet access and the means to use it in their homes. Of course we can all argue about the bad things – like pornography available to young kids and cyber bullying – but in general, our lives are better. The world’s knowledge at our fingertips is helping in every way.
“The biggest challenges are around privacy and cybercrime. I fear that we do not take the threats seriously enough. In the hands of a corrupt regime, or company, our freely given data could be used against us.
“In 25 years’ time, fast access will be possible from every spot on the planet... and possibly beyond! Every living thing of value – like chickens, cats ... and children – will be internet connected, as will everything from cars to curtain tracks.
Happy Birthday, world-wide web!
Posted by Richard Holway at '09:41'
Results for the year to December 31 2013 for the cloud ecommerce marketplace provider cloudBuy (who has rebranded from @UK - see here) reflected on-going momentum within the UK but also internationally, where it is looking to expand.
Revenue was up a very healthy 35% to £3m and sales of web and ecommerce services were up 73% to £2m. With a drop of 12%, Company Formations declined more sharply than previously (now £773k), but revenue from Coding increased by 18% although that only takes the total to £187k. Loss before tax increased 10% to £936k but it was a year of investment and expansion and the gross margin improved – up from 79% to 85%.
It has been quite a year, as cloudBuy put itself in order following a poor FY12 (see here). The rebranding was the outward face of substantial change as it positioned to take advantage of international opportunities in particular. It strengthened the management team, raised equity funding, launched in the Asia Pacific region with partner Visa and won its first Australian contract. The UK also performed well with new business with Invest Northern Ireland and the Tungsten Corporation. Looking forward, the company is anticipating high levels of spend on UK social care marketplaces by local government and is expecting to benefit from the move to personal health budgets too. The new financial year is shaping up nicely with a contract win for a social care marketplace with Northampton County Council, and a contract with a major central government agency for content management technology that will be worth £406k initially, potentially rising to £600k in the first year.
After a poor FY12 the most recent year was stronger, the company has the building blocks in place for further growth and is becoming less reliant on a narrow market.
Posted by Angela Eager at '09:31'
The UK IT recruitment market is again the fastest growing IT market for Zurich-headquartered global staffing giant Adecco (see here), with Q4 revenues in UK&I up 10% in constant currency (ccy). This more than reverses the 7% fall in UK&I IT recruitment in Q4 last year (see here). It is also twice the rate of Adecco’s IT recruitment business worldwide (ccy).
Growth in Adecco’s UK&I business as a whole is also accelerating, up 7% to €501m in Q4 vs. 1% growth the previous quarter. The UK EBITDA margin was off a bit at 2.5% vs. 2.9% last time, impacted by €2m restructuring costs.
Permanent placements in the UK were also up 2% (ccy) - the first time we have seen this in positive territory for some time, suggesting a more optimistic picture for hiring full time staff. One quarter doesn’t make a trend of course, but it does reflect improving economic conditions in the UK.
Posted by John O'Brien at '08:15'
Pleased to announce the 4th WCIT Enterprise Awards Dinner 2014 - “Championing Entrepreneural Spirit' - on Thursday 12th June 2014 at Plaisterers’ Hall in the City of London
My friend John O’Connell has been behind this “Oscars” for Technology Entrepreneurs where we recognise and applaud our successful tech entrepreneurs. It’s a great evening and I’ll be there alongside others like Mike Tobin from TeleCity, Steven Kelly (HMGovt COO) and Julian David (techUK are supporting the event for the first time this year)
Tickets (ex. VAT) are £145 each or £1,300 for a table of 10. To book your place, please click here to register for a table.
Picture shows John O’Connell with Stuart Clark (of Impendium Ltd) winner of the 2011 WCIT Emerging Entrepreneur award. Impendium is the second ‘WCIT mentored’ company achieving an exit – being sold in Jan 14 . See Deutsche Bank buys Impendium.
Posted by Richard Holway at '07:08'
There’s just a few days left for you to submit your registration for the fourth in our series of Little British Battler events, to be held in London on Wednesday 23rd April 2014.
This time we are particularly seeking to meet companies that are playing to our main theme for 2014 – Race for Change. The theme alludes to a challenge that companies face today more so than ever before – to embrace technological change before nimbler competitors eat their lunch!
We want to hear from CEOs of small, privately-held, UK-owned software and IT services companies that can demonstrate that they are ‘in the race’ – either because of the way they are using technology to change their own businesses to disrupt incumbent players in their market; or because their technologies are transforming the way their customers do business to disrupt their established competitors.
As usual we will select twelve CEOs to meet the TechMarketView research team in central London in closed session to present their company and its market propositions. In return we will give unbiased, constructive feedback based on our extensive knowledge and experience of the UK software and IT services market. Each session lasts 50 minutes and there is no fee or commitment involved.
The twelve companies will also be featured in UKHotViews, the most highly regarded and widely read source of opinion and commentary on the UK IT scene, and in a special research report distributed to selected ‘movers and shakers’ in industry and government.
Many of the CEOs who participated in previous Little British Battler events have seen real benefit to their company in terms of increased market visibility and access to new business opportunities (see here for just a sample). This is an unparalleled chance to get your company on the radar of the UK’s premier software and IT services research firm.
Candidate companies must be headquartered in the UK (i.e. not subsidiaries of foreign firms), privately held (though may have accepted external funding), with annual revenues under £25m. Companies must derive the substantial majority of their revenues from software and/or IT services and/or IT-enabled business process services.
If you want to apply, please click here and fill in the registration form (you may apply again if you were previously unsuccessful).
The closing date for registrations is Friday 14th March. We aim to notify successful applicants by Friday 28th March.
Should you have any questions, please email us at firstname.lastname@example.org.
The TechMarketView Little British Battler programme is run in association with corporate finance firm MXC Capital.
Posted by HotViews Editor at '07:00'
If the biggest hassle in your life is paying – or splitting - your restaurant bill, you’ll be pleased to learn that there’s a growing number of start-ups who are here to help.
The latest to join the fray in the UK is London-based (and confusingly branded) Flypay which has just scored £1m in venture funding from London and Tel Aviv based Entrée Capital. The premise behind Flypay is that you download the app on your smartphone and when it’s time to pay your bill, you (and if sharing, your pals) scan the QR code on the table and voila the bill is paid.
I have no idea how the app handles the all-to-common occurrence of querying the bill, or if you want to split the bill unevenly between your party, and how it all connects to the restaurant’s ordering systems, and whole a host of other things which really makes me wonder if Flypay (and its kin) is rather overegging the omelette, so to speak.
Anyway, they have a couple of fast-food restaurant chains trying it out in a few of their outlets and obviously a bunch of hopeful investors, so let’s see if it really does ‘fit the bill’.
Posted by Anthony Miller at '21:40'
Computacenter’s full-year results were in line with expectations set at the company day in November and the January trading update (see TechMarketView’s comment here). Overall revenues were up 2.5% in constant currency, at just over £3 billion. Pre-tax profits were up 3% to £81.7m (£50m after exceptional items).
Computacenter can be pleased with UK performance (c.42% of Group revenue) with revenue growing faster than across the sector, up 7.6% fuelled by growth in the Supply Chain business and the focus area of Services, where revenue was up by 6.2% with improved margins. The German business, 41% of the total, responded to remedial action as Group implemented UK solutions to the local problems of poor governance and inflated contracts. The other problem area, France, at 15% of total revenue has yet to be completely sorted out with further management changes together with more actions to cut costs expected this year.
Looking ahead, the near term boost as customers migrate from the obsolescent XP to Windows 7 (sometimes 8) is likely to continue well into 2014. Prospects for global desktop contracts remain good as technology intensity increases and as the range and number of devices used continues to grow. In the key financial services sector, Computacenter’s business will be boosted by the necessary reorganisation, technology refresh and re-purposing of bank branch networks. In public sector business, the company will continue its policy of bidding only where there is a clear route to profit, as evidenced by the FCO win and the MoJ bid withdrawal. Computacenter’s pragmatic approach to cloud, see our comprehensive study, also opens the door to deeper relationships with customers as well as to larger managed services contracts. With better prospects for Europe, tight management control and several avenues for growth, we can be confident of continued progress in 2014.
Posted by Peter Roe at '10:05'
We noted a nice update from WANdisco, who provides valuable software infrastructure for big data technologies. It has signed a distribution agreement with Carahsoft Technology in the US which will see the trusted government IT solutions distributor take Wandisco’s Non-Stop Hadoop for Cloudera into US federal agencies. This could be a real boost for WANdisco, not just in terms of sales to the US government but in building further credibility and use cases for the company and the portfolio. This move follows some impressive prelim results last week (see here), with the full results due next week.
Posted by Angela Eager at '10:04'
AIM newcomer Kalibrate Technologies (formerly KSS Fuels), a provider of software and services to the petroleum retail industry who raised $9m (net) when it listed on AIM in November (see here), has released its first set of interim results. It listed in order to accelerate growth and international expansion and the results for the six months to December 31 indicate it is on its way with an 18% lift in revenue to $14.1m. Underlying EBITDA was up 53% to $1.9m (but that is excluding exceptional items and business amortisation from business combination), while underlying PBT was up 70% to $1.6m. However, at an operating level is posted a loss of $496k, although this was lower compared to the year ago period ($679k loss).
North America (52% of revenue) and ‘Rest of World’ (28% of revenue) are the biggest and highest growth markets. At 20% of revenue, Europe is the smallest portion and revenues were down 30% yoy – due to a strong comparative when the company signed its largest perpetual licence contract for its pricing product – but take out the impact of this deal and the region also saw growth according to the company.
The oil and gas sector is fuelling a good number of software and services companies. Arria (see here) and Servelec (see here), who both serve the sector although different parts of it with very different product sets, also listed in recent months.
Posted by Angela Eager at '09:41'
Malaysian enterprise software provider Fusionex International, who is listed on the LSE, and is aiming to grow big in analytics and big data provided the latest indication that big data is on the move with the news that it has secured two contracts for its GIANT big data analytics solution which was launched in December 2013. Details are scant but two customers who took part in an initial trial have now signed full contracts. This indicates the importance of ‘try before you buy’ in the big data world as organisations work out what the specific value proposition and use case is for them. We estimate revenues from big data software are still very low (1%-2% of the UK enterprise software market) but there are recent signs of more spending in the area (see here and here). And Fusionex itself signed a multi million dollar five deal GIANT contract in January.
Posted by Angela Eager at '09:39'
We’re always keen to monitor the progress of our Little British Battlers (LBBs), so it’s great to be able to report that two of our inaugural LBBs – Littlefish and CentraStage – are now working together. Nottingham-based IT manages services provider Littlefish recently adopted CentraStage’s SaaS endpoint management technology. Littlefish will deploy the system across all of its managed services customers as part of the Littlefish Labs product suite. The contract is both a good win for CentraStage, which displaced a larger US rival, and a sensible move by Littlefish as it plans its next phase of growth.
Both these LBBs have evolved and grown since we first met them back in 2012 and are still punching above their respective weights (see Little British Battlers – Q1 2012 for our views on them then). Over the past 12 months, Littlefish has grown by 32% and now has over 450 customers. Whilst CentraStage recently reported over 50% revenue growth and a doubling of its headcount in 2013 (see CentraStage keeps punching above its weight if you’re an eligible TechMarketView subscriber).
If you’re the CEO of a small, privately-held, UK-owned software and IT services company that is punching above its weight, then we’d like to hear from you too. It’s not too late to apply for the 2014 LBB programme. The deadline for entries is this Friday, 14th March, and the on-line entry form shouldn’t take long to complete at all. For more details, or to submit your application, just click here.
Posted by Tola Sargeant at '09:30'
Craneware, the Scottish provider of revenue integrity software to the US healthcare market, continues to make steady progress. Sales are increasing and as expected it’s selling to progressively larger hospital groups with the size and length of deals also on the rise.
As presaged in Craneware’s trading update (see Performance remains in line for Craneware), revenue increased by 5% in the first half to $21.1m and PBT is up by 7% to $4.8m. With high levels of revenue visibility for its SaaS solution, the management team is also confident of continued future growth. Visibility over FY14 revenue has increased to $41.7m (31 December 2012: $36.7m).
We sense that the US healthcare market is beginning to settle after a period of uncertainty caused by the implementation of the Affordable Care Act and Craneware is well placed to benefit from the ensuing changes. New business models for reimbursement, healthcare consumerisation and increasing levels of auditing pressure are amongst the trends that look set to drive demand for systems like Craneware’s. Its software helps healthcare providers more effectively price, charge, code and retain earned revenue for patient care services and supplies, with the aim of optimising reimbursement and minimising compliance risk. Given that Craneware already counts a quarter of US hospitals as its customers, and that a high proportion of the market still relies on manual processes, it’s no surprise that the Board is optimistic about the outlook.
Posted by Tola Sargeant at '08:37'
The Ministry of Defence (MoD) has chosen Capita and subcontractors engineering firm URS and management consultancy PA Consulting, as preferred bidders to transform and manage the new Defence Infrastructure Organisation (DIO). Consultation is now going on with the trade unions with the aim of commencing in spring 2014.
Worth £400m over the next ten years, the partnership will start with an 18-month project to produce a blueprint for the future asset management of the estate. After approval, the partners will then commence developing ‘a world-class infrastructure delivery organisation capable of supporting the long-term objectives of the MOD’.
The scope of the contract is quite literally huge, covering 230k hectares of MoD estate, with the aim being to ‘transform the facilities and services that allow the armed forces to live, work, train and deploy on operations’. It also has the potential to deliver huge savings, to the tune of over £300m per year.
The news will be a big disappointment for Serco, which was bidding with DTZ and Bechtel, and was down-selected alongside Capita and a third consortium Telereal Trillium, KPMG and Mace, back in August 2012 (see here). Only recently Serco highlighted the DIO as one of its hot targets for 2014 (see Serco rebuilding trust with UK Government – lessons for all Government suppliers). Capita is certainly proving a thorn in Serco’s side right now (see MoJ selects Capita for next phase of electronic tagging).
For Capita, it shows again what a formidable player it is, and now increasingly in the IT-enabled support services market – Serco’s traditional hunting ground. Capita will have been helped by its strong credentials in managing large, complex public sector outsourcing programmes, and property and infrastructure management capabilities. Partnerships are now strengthening that capability.
URS brings international experience through work with the US Department of Defense, in areas like engineering, architectural design, and construction – very important for the MoD estate outside the UK. PA Consulting meanwhile is already a trusted advisor to the MoD, with experience in change management and consultancy. PA will offer ‘insight and knowledge of defence services within the partnership’ via the use of data analytics – another emerging hot area for BPS providers today.
Posted by John O'Brien at '08:04'
Last week, it was widely reported that Buddi, an SME electronic tagging provider, had walked away from its contract with the Ministry of Justice. Buddi had been awarded one of four Lots last August alongside Telefonica (SIM cards), Capita (staff and monitoring) and EADS Astrium (mapping software). The new contracts were to replace previous deals with Serco and G4S (see Capita bags MoJ’s £400m electronic tagging deal; the incumbents were forced to withdraw from the tender process for now well-publicised reasons (see here and here). Apparently Buddi had spent around £2m over the last two years in bidding costs.
Over the weekend, The Telegraph published an interesting interview with Buddi’s founder and Chief Executive, Sara Murray, in which she is quite damning of the complexity, cost and bureaucracy of UK Government’s procurement processes. This will not be what the Cabinet Office wants to hear from an SME considering the efforts it has put into rebalancing its supplier base and making things easier for small businesses. Murray’s comment: “to work with the Government, you need to be able to afford a lot of people for a long time, and keep very close to Whitehall”, chimes with the message we still get from many suppliers in the marketplace.
Interestingly, Murray states that this is a UK-specific phenomenon. The Telegraph highlights that Buddi has a growing international business (Buddi also works with 36 out of 42 police forces in England & Wales). Her message is that outside of the UK, Government’s are more willing to take risk in exchange for innovation. On this specific deal, Murray told the Telegraph that they were bombarded with requests for “further specifications and designs” and were asked to “hand over intellectual property to other contractors”. According to the FT (see here), the MoJ explains, “We have been unable to agree on certain technical and commercial aspects of the contract with Buddi to provide tags. We have therefore decided to recompete this element of the contract to ensure we deliver an efficient service that represents best value for hardworking taxpayers while protecting the public.” For us, the situation just goes to highlight the uphill battle that the Cabinet Office continues to face as it tries to balance its objectives i.e. working with a broader supply base while seeking the sort of efficiencies that are sometimes easier to achieve with larger companies on bigger deals.
Posted by Georgina O'Toole at '09:48'
Oracle is set to be bumped out of the National Audit Office. According to a tender published by the NAO, it is looking for a replacement for its existing Oracle e-Business ERP system, plus additional functionality. The contract, which is covered by the General Procurement Agreement (GPA), is worth £1m over seven years with renewal potential and covers licences, licence support, design and implementation, installation, business change, training and second line support including disaster recovery. The NAO is no doubt acting on initiatives to generate sustainable savings (see here), and the tender could be an attractive proposition for alternative ERP providers, like UNIT4.
Posted by Angela Eager at '09:22'
Really interesting article by Andrew Clark in The Times today Lastminute finds clock is ticking. For those without a subscription, Clark reminds us that Lastminute.com was the darling of the last dot.com age which was sold to Sabre in 2005 for £584m. Clark says that Sabre has been trying to give it away in both 2012 and 2013 – clearing the books ahead of its own upcoming IPO.. Clark points out that Lastminute.com doesn’t even have a smartphone app and has been allowed to whither; becoming just an also-ran amongst many much better travel booking sites. I wonder whether Brent Hoberman – or even the ennobled Martha Lane Fox - is interested in buying it back?
Lastminute.com is already a Business Studies case study. To me it demonstrates yet again how M&A can be mishandled and too often is the death knell for young, growth companies. It shows how true our Race for Change theme is. “The first one now will later be last” rings in my ears. It also serves, as Clark also points out, as a warning to those investing in some of today’s ‘bubble stocks’ where Clark singles out AO.com and BooHoo.com for mention.
Posted by Richard Holway at '09:11'
As expected Escher, the outsourced point of service software and services provider to the postal sector, confirmed “robust” results for the year to December 31 2013 (see here) but a change in the business mix meant EBITDA dropped.
While revenue was up 8% to $24.7m, adjusted EBITDA was down from $6.4m to $4.2m. A shift in revenue mix from licence sales (down 19%) to lower margin services, plus continued investment in its Digital and Interactive Services business were the causes. PBT was $1.5m vs. $4.4m.
With its core market in transition, Escher is juggling its traditional post office retail POS business with emerging digital developments. Existing customers appear to be loyal, with all those whose contracts ended in 2013 opting to renew, some with extensions. It needs take-up of its new RiposteTrEx digital post box solution, which is designed for the digital government agenda to enable citizens, governments and businesses to communicate, collaborate and transact with each other anytime and from anywhere, to capitalise on the digital shift. There was movement in December, when the South African Post Office selected the RiposteTrEx platform which is a positive start but it is early days for the solution and we get the impression that RiposteTrEx will involve a long sales process. Escher is also heavily reliant on a few large customers and would have a more confortable base with a wider spread. However, the digital business, plus the Interactive Services business which won its first NFC payments contract, are where this can start to happen and where the company can exploit market developments, so overall it is in respectable shape.
Posted by Angela Eager at '08:54'
The UK is co-sponsoring CeBIT this year which is why David Cameron and Angela Merkel are at the opening today. Searching the news channels I found this from a German newspaper “Britain might be better known for chips that go with fish than those inside computers.” Cameron kept the level of comment at this heady level with “A few years ago, Skype was a typo, a tweet was something you heard from a bird and a cloud was something you saw in the sky”.
On a more serious level, HMGovt announced £50m funding for UK companies engaged in the Internet of Things and closer cooperation with Germany on things like 5G and the next generation of broadband. Cameron also said he wanted the 'complete elimination' of mobile roaming charges in Europe.
Both Cameron and Merkel bemoaned Europe not having a Google, Microsoft, Facebook or Amazon. I’d like that too. But we do at least have a SAP and an ARM. Indeed, I really do think that there is, at last, a renaissance in UK tech. With the current backlash against tech companies located in California, what better place to relocate than London?
Posted by Richard Holway at '07:26'
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New white paper provides a valuable buyer’s guide
Making the decision to co-locate your IT equipment is becoming an increasingly straightforward business proposition as the criticality of IT increases. Greater compute power and the need for agility place greater demands on the data centre –- and for most organisations the challenges of additional complexity, cost, capacity, flexibility and scalability do not warrant the risk and effort required to build and subsequently maintain an in-house facility. However, what happens next can make all the difference. Getting the choice wrong is not a minor hiccup because this is a long term commitment with far-reaching consequences.
At first glance, although there may appear to be strong similarities between data centre co-location providers, these are superficial. Whilst accreditations and a good impression from a site visit are important, it is often more subtle factors that make the difference between a successful or a stressful partnership. Providers can appear to promise much the same which can lead to a commodity selection. However, doing so can be catastrophic, resulting not only in downtime but also poor service and lack of flexibility for change. Successfully navigating the selection entails ensuring that the TOTAL PACKAGE – including the facility, people, service relationship and cloud and connectivity options – fully supports the business from partner that you can trust.
Such a critical decision requires careful research to be applied to the selection process from start to finish. But how can you identify the key factors in this due diligence?
Datum Datacentres commissioned a new white paper to provide valuable guidance to address this issue. Aimed at both those within IT and the business “Data centre co-location: an easy decision, a difficult choice” is a must-read for organisations considering their data centre strategy. Download your copy now.
Posted by Datum at '00:00'
Some interesting news items caught my eye today on three of the themes in my oft-repeated Predictions.
I really do believe that wearable computing will be big. But, as I have said many times, it will only take off if one device (eg a ‘watch’) can do many things. At the moment it seems that every wristband has a separate function. So you would soon run out of arm (or leg) room for them all. I envisage a ‘watch’ which has many sensors. These can then be used by third party app developers to produce many different applications.
Although still a long way off my ideal, today Azoi Inc launched Wello. “Wello is a thin lightweight smartphone case embedded with sensors that measures blood pressure, electrocardiography (ECG), heart rate, blood oxygen, temperature, and lung functions to a high level of accuracy”.
Put that in a watch, add GPS, and accelerometer and other sensors. Add things like a blood test that doesn’t require drawing blood (apparently already possible) and you start to get a wearable device with huge potential. Obviously the healthy and worried well (my doctor tells me that is what I am!) but most importantly the old who want to stay in their home. I really do believe we are getting closer to the doctor calling YOU to tell you "you are about to have a heart attack and an ambulance will be with you in 4 minutes”. I wonder if Apple’s iWatch will be like that?
Last Sunday I was the nominated driver for friends to a Birthday Party so no drinks for Holway. How much easier if I had driven there and then got my car to drive me back. Fanciful? I don’t think so. Continental have estimated that autonomous vehicles could save $5tn in deaths and injuries. They reckon it will be a reality by 2025. Indeed, they have opened a debate about liabilities. If you get hit by a driverless car, who do you sue? I somehow suspect that driverless cars are more likely to be hit by cars with real drivers!
My neighbour was given a fantastic drone with HD camera for Christmas (Well, Boys must have their Toys!) Drones are now so cheap that they are being used in an increasing number of applications. Indeed I’m sure you have all seen the drone pictures of the floods on the Somerset plains or the amazing pictures of the dolphins in the papers this week.
Anyway, all areas where science fiction is fast becoming reality.
Posted by Richard Holway at '18:36'
It is an uncomfortable fact of life that IP is increasingly being ignored by most consumers. Copying music and films is pretty commonplace. People just don’t see it as a crime.
As blogs and on line newsletters proliferate, they all use photos and images which technically infringe someone’s IP. Google Images has millions of such illustrations and most people use them without a second thought to ownership.
So it was quite interesting to read today that Getty Images is making 30m of their stock photos available for free. All they ask is to be credited and for users to link back to Getty’s own servers. Clearly this will allow them to do all kinds of commercial things – maybe even serve up advertising.
I can understand the move but, bluntly, I don’t think it stands any chance of working. It is too easy to insert an image in a blog without such accreditation. And what are Getty going to do to police it?
Posted by Richard Holway at '18:29'
Data analytics is fast becoming another hot space for IT/BP players. Accenture has announced it is six months into an 18-month ‘smart water’ pilot with Thames Water, which could well be the first of its kind in the UK.
Accenture is implementing data analytics from Tibco Software and Space-Time Insight (STI) to ‘create a single view of Thames Water’s systems and assets’, such as pipe and treatment facilities. Thames Water began introducing smart water meters last November that collect water usage data every 15 minutes.
While the deal is unlikely to be huge in revenue terms, it is significant for a number of reasons. Firstly, Thames Water already partners with Wipro for applications and infrastructure and Steria for billing and customer services. But Accenture has been trusted to pilot this valuable data analytics project.
In our recent ESASViews report Visual Data Discovery: cracking the pervasive insight nut, we showed there are significant opportunities for organisations to use visual data discovery (VDD) and analytics technology more widely, to create more informed decisions and faster insight to action. The utilities sector is a good target, since reducing outages and leaks has huge cost benefits.
Accenture’s partners are: Tibco, a well- known name with its Spotfire VDD technology (apparently used by 9 of the top 10 oil and gas majors). STI is a relative newcomer with a next generation ‘situational intelligence tool’ that is able to bring ‘smart meter, enterprise, grid and environmental data into unified visual and analytic context’. The technology is used by a number of American utilities but this looks like its first big win in the UK. It follows a $20m series C investment from UK private equity firm Zouk Capital last September.
This pilot is a good example of how analytics services contracts could evolve, starting out as technology pilots, and in time maybe evolving into a broader managed service/outsourcing arrangements. It is easy to see why IT/BP players like Accenture are keen to win such business.
Posted by John O'Brien at '09:42'
Although European TMT M&A deal flow was almost unchanged again in February (after allowing for the shorter month), average deal sizes increased, according to latest data from corporate finance firm, Regent Partners.
During the month there were 244 deals worth a total of $20.7bn, acorss which the average Price/Sales multiple increased to 1.5x while the Price/EBITDA multiple fell to 8.5x. Listed companies (as represented by the Techmark Index) resumed their upward trend after a slight reversal in January.
February saw a number of interesting acquisitions involving UK software and IT services companies, including yet another deal by the voraciously hungry Advanced Computer Software (see here), the entry into the German market by London-HQ’d, privately-held 'nearshore' IT services firm, Endava (see here), a services acquisition by family-owned mega-reseller SCC (see here), and the acquisition of London-based web advertising fraud detection start-up Spider.io by Google (see here).
Eligible TechMarketView subscription service clients can read our concise analysis of UK software and IT services M&A activity by downloading the latest edition of IndustryViews Corporate Activity.
Posted by HotViews Editor at '09:20'
We received a very thoughtful comment from a UKHotViews reader about my musings on the online ‘meals on wheels’ industry wondering why I had such a ‘downer’ on the subject. He asked whether it was the mega-valuations or the underlying business model that troubled me (you can read the full comment in Anchors afloat?).
It was indeed the valuation issue. There’s nothing wrong with the 'meals on wheels' business model assuming it makes a profit. Indeed the more players the better the choice as far as I am concerned.
Clearly, meals-on-wheels aggregators like GrubHub (see Anchors aweigh!) should have a margin advantage over the likes of Dominos, Pizza Hut et al who actually produce the food as well as deliver it. The issue is what is the ‘right’ margin?
I thought Nasdaq-listed internet restaurant booking site OpenTable (trades as Top Table in the UK) might be a good proxy. Opentable, achieved revenues of $190m in 2013 and made $46m OP, i.e. 24% operating margin (2012 and 2011: 23%). This is more like a software company margin.
OpenTable enjoys a $2bn market cap, around 60x net earnings. Just to give some context, SAP, which runs a 27% operating margin, has a market cap of $95bn and trades at 22x net earnings. Oracle – with a 39% operating margin – is valued at $177bn, about 17x earnings.
I will leave it to you decide whether you think there is a ‘valuation issue’ with online meals-on-wheels outfits. As you ponder this weighty matter you may wish to re-apprise yourself of my thoughts on the difference between 'great companies' and 'great stocks' (see here).
Posted by Anthony Miller at '08:58'
One small company we’ve followed with interest over the past nine months has been MoPowered, which provides online retailers with mobile-optimised m-commerce capabilities. In January they published a positive trading update for the year, see here, and today they have announced further progress in expanding their customer list and target sectors with 20 new clients and a move into other retail sectors including food and drinks, gifts and home improvements.
MoPowered’s experience is mirroring that of many companies in the payments and commerce world. Now that they have developed and tested the technology they have to move quickly to establish scale and market position. MoPowered has recruited sales and product leadership resources to drive growth in the UK with the expectation of a European launch later this year. The second component of success is the ability to on board customers very quickly using standard systems and at a low marginal cost.
This AIM-listed company is likely to generate substantial growth over the coming year, building on the c.33% growth in 2013, and has worked hard on getting the economics of customer recruitment right. Today’s statement supports our confidence in the company’s progress in terms of revenue growth and improving profitability.
Posted by Peter Roe at '08:30'
There’s just a week left for you to submit your registration for the fourth in our series of Little British Battler events, to be held in London on Wednesday 23rd April 2014.
Posted by HotViews Editor at '07:21'
It sounds like a sequel to our HotViewsExtra ‘Egress Software secures rapid growth’. And in a way it is. It’s another step in the rapid growth story for Egress Software Technologies, the provider of file and email encryption software. The company has secured an investment of £2.2m from Albion Ventures LLP – equivalent to Egress’ annual revenues in its last completed financial year. Albion was seeking an investment to fit with its preferred investment profile: a rapidly growing company in a “fast growing dynamic market”. In this case, the market is ‘cyber security’.
CEO of Egress, Tony Pepper, has stated that the next two years will be crucial for the growth and long-term success of the company. When we spoke to Pepper a couple of months ago, he stated that over the next year the business was expected to grow from a 32-person business to a 60-person business, as Egress benefits from gaining UK Government CESG CPA email encryption certification up to IL3 for its Egress Switch product. That level of growth will be tough to manage so Albion’s experience with fast-growing businesses will certainly be welcomed.
What will Egress 'secure' next?!
Posted by Georgina O'Toole at '10:55'
It has transpired that Liverpool City Council has decided to end its Joint Venture with BT – Liverpool Direct Limited (LDL). The JV, which was originally set up in 2001, had been extended to 2017 in previous negotiations. However, we understand the decision has been made to ‘buy out’ BT’s 60% stake in the JV and bring council services back in-house.
Over the life of the arrangement, LDL has provided services ranging from IT to payroll, HR, revenue services and contact centre services. The JV employed 1,300 people, served 350 public and private sector organisations (including schools) and was turning over c£80m per year. In August 2013, we wrote in HotViews (see TCS to replace BT at SIA) that LDL had been the incumbent at the Security Industry Authority (SIA); but the contract was gained by TCS at retender. We assume the Council will continue to serve LDL's existing customers.
According to the council, BT had promised £5m of savings over the next three years as part of the extension agreement. However, the council has since returned to BT to ask for further savings in order to help towards achieve the £156m of savings the Council needed to achieve. BT has said it was unable to commit to any additional savings.
The LDL JV has been controversial with media commentators questioning the value for money the council was getting from the deal. However, the council has also praised the JV along with BT’s broader support of the City, for example, through job creation and the support of growth of high-speed broadband services. Indeed, it appears that the council only feels in a position to go it alone due to the learnings it has taken from the partnership.
Nonetheless, this will be a blow for BT. And it won’t be the swansong that Neil Rogers, BT’s President of Global Government at BT Global Services was hoping for as he retires (see Neil Rogers retires from BT Global Services). Rogers is also Chairman of LDL. The news comes just one month after it was announced that services from another BT local government partnership – One Connect Limited with Lancashire County Council – would be taken back in-house. At Lancashire BT will focus on ICT, revenue, benefits and payroll, while services ranging from welfare services to HR will be returned to the Council.
Posted by Georgina O'Toole at '09:53'
The combination of a depreciating rupee and the loss of two large clients, means offshore BPS pure play EXL Service is now expecting FY14 to be more or less flat. This is a stark turnaround in fortunes from last year, when it delivered 23% top line revenue growth, making it one of the fastest growing BPS players (see here).
EXL said FY14 revenues would be in the region of $480m and $500m, which would be flat to up 4% at best on FY13. The uncertainty is losing two big clients relating to its acquisition of OPI in 2011 (see EXL pays $91m for F&A specialist OPI), which will have a negative impact of between $12m and $20m in FY14, with a further impact in 2015.
EXL actually reduced its FY13 guidance in mid-year as a result of the client losses and depreciation in the rupee (see EXL downgrades FY13). FY13 hit this guidance with revenue up 8% to $478.5m. Operating margins meanwhile were also up to 14.1% vs. 12.9% last time, suggesting that EXL is now bolstering its bottom line as it adjusts for slower growth.
Q4 already shows a slowdown - revenue was up just 5.4% to $124.1m. This was actually better than expected thanks in large part to its decision analytics business, which was up 24% yoy and 19% qoq. Operating margins meanwhile were particularly strong, rising to 18.5% compared to 13.2% last time.
Business process analytics is one of EXL’s emerging opportunities - sensible for a mid-sized BPS player with specialisms across a select few verticals - and should also be higher margin business. Growth here is apparently being driven by risk and marketing engagements in the banking, insurance and health care sectors. EXL has grown its analytics operation from 700 to over 1,000 people in 2013, with new dedicated sales resources in the US and UK.
Business process analytics is a hot area within the UK BPS market, which we will be exploring in a forthcoming report for TechMarketView's BusinessProcessViews research service.
Posted by John O'Brien at '09:41'
Two announcements show the direction big data development is taking, as attention turns to accessibility and applications, specifically enabling business users to find and use the nuggets of data within their data sets.
A partnership between operational intelligence expert Splunk and data visualisation specialist Tableau will make Splunk’s machine-to-machine generated data directly available to Tableau business users. There is nothing magic happening technically (Splunk’s recently released ODBC driver is being used to present its data as a native data source within Tableau) but it does put a new class of data into the hands of business (not just IT) users. When combined with more conventional data, this could be the springboard for a diverse range of data driven business applications, which are essentially the front end for data sets and big data platforms (see Visual data discovery: cracking the ‘pervasive insight’ nut).
SAP’s latest announcement, around the HANA Cloud Platform, also majors on accessibility and it specifically calls out the potential for developing real-time data driven applications: “startups, ISVs and customers can now build new data-driven applications in the cloud”. HANA Cloud Platform is now positioned as a ‘full platform’, supporting application development. SAP says over 1200 start-ups are developing on the platform with 60 of their offerings live. Revenue from the start-ups’ applications is low but has crossed the $10m mark. A consumption-based pricing model makes it easier to consume the HANA platform – select from three base level/base price offerings, SAP HANA AppServices, SAP HANA DBServices, and SAP HANA Infrastructure Services - and add on options as required e.g. predictive analytics capabilities. And the SAP HANA Marketplace provides a vehicle for testing and deploying applications.
ESAS providers can build many of these data driven applications but what is potentially disruptive is that the emerging technologies are making it easier for enterprises to build their own.
Posted by Angela Eager at '09:39'
Pleased to announce the full year results for RCM Technology Trust (RTT) released to the market today. I’ve been a director at RTT since 2007.
Results for FY13 to 30th Nov 13 were nothing short of excellent with NAV up 46.9% but the share price (because we’ve almost eliminated the discount to 0.2%) is up 61%. This performance is significantly ahead of the benchmark index used (indeed is ahead over any 1,3 or 5 year period too) and of our competitors. We got a major fillip by being named by Investors Chronicle as one of their ‘Top 100 Funds’. No mean achievement as there are nearly 3000 operating in the UK!
I’m also very pleased to say that the great performance has continued since the year end with RTT’s share price up another 9.5% since 30th Nov 13.
The single largest contributor to performance was our investment in Tesla which I have commented upon before. But other major contributors were SunPower (manufacturer of solar cells), Micron (NAND and DRAM memory storage) Western Digital (Hard disc drives) and Google. It’s really interesting how some of the ‘unsexy’ sectors like flash storage and hard disc drives have really prospered. And hat-tip to the managers for their foresight here.
I’ve long believed that directors should have ‘skin in the game’. Indeed if I was a policy maker I’d both insist on it and incentivise to get remuneration paid in shares (extremely difficult for directors for some ridiculous reasons) But, as you can see from the R&A issued today, I invested heavily when I joined the RTT board in 2007 and have been richly rewarded with a 160% rise since. In this regard, also good to see the fund managers this year taking a goodly part of their performance fee in RTT shares too.
Finally, David Quysner is stepping down as Chairman at the AGM in April to be replaced by Robert Jeens. David has been chair since 2004 and many will also know him as the Chair of Abingworth. He’s been a great Chairman with, of course, the foresight to recruit me onto the board! Shareholders should be very grateful for his stewardship.
Posted by Richard Holway at '08:16'
AIM-listed Arcontech is a real time software specialist providing products and bespoke systems for collection, processing, distribution and presentation of time sensitive financial markets data. After reporting full-year figures up 25% for the full year, see here, the half-year figures reported today, to the end of December, showed growth of only 15%, to £977k, with the company bemoaning the slower sales cycle.
Nevertheless, this represents good progress in a dynamic market and the management have been able to build the product pipeline and improve the cost performance with the loss for the period 74% lower than the first half of the previous year, at £69k. Recurring annual licence fees represent 99% of Group turnover
Arcontech’s portfolio can help investment banks and other trading organisations manage their data costs and also enable them to supply value-added data to their customers. This is of increasing importance as the need for cost reduction grows at the same time as investment products become more complex.
With an annual run rate of revenue standing at £1.9m, net cash of over £800k and operating costs apparently under control (revenues now cover 94% of the cost base as opposed to 84% for the full year), the management can be positive about the outlook for the full year and a continued move towards profitability.
Posted by Peter Roe at '08:03'
We’ve now been through the detail of Capita’s FY13 results. Looking at the headlines you’d be forgiven for thinking all is going swimmingly, with 15% topline growth, 8% organic growth, and double-digit margins (see Capita hits 8% organic growth).
However, looking under the covers points to inconsistency across Capita's various divisions. Some areas like justice and secure services and customer management are growing at a rapid rate thanks to recent big wins and acquisition activity. Meanwhile, other others divisions, like IT services, insurance & benefits and health & wellbeing are either displaying sluggish growth, or even declines. At the same time, group margins continue to be put under pressure.
This highlights real 'diversity of performance' within Capita's business - a growing theme across the broader UK SITS supplier landscape.
Subscribers to TechMarketView's Foundation Service and BusinessProcessViews research stream can read the full analysis of the performance and prospects for the UK's leading BPS supplier here.
Posted by John O'Brien at '07:30'
The cyber crime empire is rising. Far evolved from the days of a curious few testing firewalls from their bedrooms, hacking has grown to become an industry of its own, organised and dedicated to the nefarious tasks of everything from data mining to grand scale hacktivism.
As those responsible begin to accrue greater finances and power, their expanded resources allow them to develop ever more sophisticated threats, testing enterprise defences ever further. With the cyber crime arsenal becoming more powerful and complex by the day, organisations of all kinds face an ever-more difficult task when it comes to defending against the tide of threats that menace them on a daily basis.
For many, that is fast becoming a losing battle. According to a 2013 PwC/UK Government report, 93% of large enterprises and 87% of smaller businesses experienced some form of security breach in 2012. A shocking figure, this was up 50% on the year before; 2014 looks to be a difficult year for many businesses.
Defending against threats that can scale from anything from a single computer to multiple networked machines that test every element of an organisation’s set-up requires a new approach to security. With so much at stake, organisations have never had to work harder to protect and defend their most valuable assets. Secure thinking is no longer just a nice-to-have, but an absolute necessity.
Understand the impact of cyber crime on your business. Find out the threats in your industry. Access collective knowledge on the ongoing need for cyber security and get up-to-date information on cyber crime from Fujitsu and its expert partners:
Posted by Fujitsu at '00:00'
It probably hasn’t escaped your notice that we are in National Apprenticeship Week. Readers will know of my passionate support for the scheme from the many posts I have made on the subject in recent years. I really feel we have ‘arrived’. Since 2010 1.5m apprenticeships have been created and half of all businesses – big and small – intend to take on apprentices in the next five years. Everyone now says apprenticeships are ‘good’ and, as I have said many times too ‘doing good, is good for business’.
In our own sector, this week we’ve heard of Accenture creating 40 computer tech apprentices in Newcastle and BT creating some 700 new posts including a new digital media training scheme. There are too many other examples to mention. This movement sure has legs!
Yesterday, as part of this, I was invited to a roundtable organised by the BVCA with Doug Richard – best known for Dragon’s Den. I’m not easily impressed, but Richard was one of the best and most passionate speakers I have had the pleasure of listening to in a long, long while. Richard completed an apprenticeship policy reform study for HMGovt. He told us – and I hope I’m not divulging any secrets – that he’d just been told that his recommendations had been accepted and an announcement would be made soon. One of the recommendations is a tax credit to firms taking on apprentices – even higher if you are an SME. The proposals seem to have all-party support.
We need to up the image of being an apprentice. For some reason it evokes images of the shop floor. But remember all doctors and all lawyers go through an apprenticeship – it’s just that we don’t call them apprentices. I – like Doug Richard – am very proud to state that I too was an apprentice. I didn’t go to university. Choosing instead to become a trainee computer programmer at the age of 18. I have no regrets. Richard pointed out that today it is harder to get an apprenticeship at Rolls Royce than to get into Oxford or Cambridge.
The UK is in desperate need of a highly skilled and young workforce. Apprenticeships are the way of achieving that. It might take a few more years but, for once, things really are moving in the right direction.
Footnote - You can download the Richard Review of Apprenticeships here.
Posted by Richard Holway at '20:57'
I don’t know what it is about the ‘meals on wheels’ market that is getting investors so excited, but it’s certainly hot, hot, hot (unlike the food I suspect).
This time it’s happening here in the UK, with Denmark-founded but now UK based internet takeaway ordering service Just Eat acquiring Birmingham-based rival Meal2Go for an undisclosed sum. Apparently Meal2Go’s EPOS technology was the main attraction.
The rumour mill has Just Eat angling for a near-£1bn IPO this year – and why wouldn’t they, given the froth around the forthcoming IPO of US-based GrubHub (see Anchors afloat?).
Posted by Anthony Miller at '10:01'
Queen’s University Belfast spin-out Analytics Engines, developer of software ‘accelerators’ for ‘big data’ applications, has scored £1m in funding led by compatriot VC firm Crescent Capital. The investment will be used to accelerate product and market development. Good to see that UK innovation is not just found in England.
Posted by Anthony Miller at '09:47'
AIM-listed, but Cologne head-quartered SQS, the supplier of independent software testing and quality management services, reported full year figures and good progress with turnover up by 7.5% to €225.8m, gross margin at 32% (a small increase) and pre-tax profits up 34.5% to €12.4m. The Group has continued the progress which began in the first half year, reported in our September HotView.
A key move was the November acquisition of Thinksoft, an Indian testing company focused on the Financial Services sector, see here, which will accelerate SQS’s ambitions in this important vertical. Thinksoft had €23.4m revenues in 2013 and its activities will be consolidated into the Group from January 2014. Thinksoft is strong in the dynamic payments market with expertise in areas such as Faster Payments. It also brings more offshore capability in India to the Group.
Central to the Group’s strategy is the move to Managed Services and longer term contracts bringing potentially higher margins, and to shift the balance away from short term engagements and a very long client list. See our December comment on the recent success in winning new deals, here. SQS is also expanding its resources to support the growing markets of mobile and e-commerce.
The outlook for SQS looks good, as companies in many sectors bring propositions to market more quickly and at the same time need to improve quality and reduce risks. Using specialist testing resource can be particularly helpful here. The US operation is showing the fastest growth, from a small base, and this operation, and the UK, should be boosted by the Thinksoft capability. Overall the Group still has much to do to reach its 2017 revenue target of €500m, requiring deeper relationships with larger customers, but 2013 saw some good steps in the right direction.
Posted by Peter Roe at '09:00'
Management didn’t seem to want to make a song and dance about it but I thought it was worthy of mention that PageGroup – the shortform soft rebrand of UK-headquartered recruitment group Michael Page International – hit one billion pounds in revenues in 2013 for the first time. Nonetheless, gross profit declined by 2.5% to £514m.
As presaged last month (see here) PageGroup’s UK business saw gross profit rise by 2% to £124m in 2013 on revenue growth of 1% to £298m. As a result, gross margins expanded by 60bps to 41.0% and, with a more streamlined operating model, UK operating margins jumped from 4.7% to 6.2%.
Management reiterated how ‘challenging’ a year 2013 was, and seemed as cautious about 2014 as peers, with all depending on the economy. Of course.
Posted by Anthony Miller at '08:55'
Today we launch a new report for subscribers to our very popular InfrastructureViews research stream. “How the leading Infrastructure Services players are fighting for their place in the cloud market” is authored by Kate Hanaghan, Research Director for the stream.
Many areas of the traditional IT services market are either declining or growing very slowly. Meanwhile, cloud services are growing double digits. The as-a-service model is creating opportunities for enterprise and government buyers to re-think how they buy infrastructure services and from whom. However, even in two years’ time, we estimate that the total cloud market will still only account for 14% of the total Software and IT Services (SITS) market. For suppliers, that means a large slice of their revenue stream will still be tied up in slow-growing (or declining) infrastructure services contracts. At the same time, they must create new offerings, redefine their positioning and adapt to a different type of commercial model.
This report looks at how the Infrastructure-as-a-Service (IaaS) market is shaping up, and the role of private cloud and orchestration. It also examines the margin challenges for suppliers and assesses the cloud offerings and relative positions of the Top 10 infrastructure services suppliers in the UK.
If you also subscribe to our newest research stream, FinancialServicesViews, you will also be interested in Cloud Services in the UK Financial Services Sector. To subscribe to any of our research streams, please contact Deb Seth.
Posted by HotViews Editor at '08:33'
When I first met the top team at UK-based, AIM-listed, ‘buy-and-build’ IT recruitment firm InterQuest almost exactly five years ago (see here), they were bullish on the prospect of more than doubling EBIT to £10m and thence increasing the stock valuation to way north of its then £9m.
Much water has flowed under many bridges since then (start here and work back) with perhaps surprising results. InterQuest closed 2013 with just £1.5m in EBIT yet the stock is currently valued at around £35m. Well, there you go!
Much has changed in the intervening years, most recently the ‘de-branding’ of its multiple recruitment businesses (they used to operate as a sort of ‘SThree-lite’) to come under the mother-brand, and more changes are likely to come, including (I postulate) the probable closure of its fledgling Singapore office which “has consistently failed to meet expectations” since it was established.
InterQuest starts the year having returned to net profit (£1m) with slight revenue growth (1% organic), and with an improving UK economy (over 90% of its business is done in the UK). Let’s see what the rest of the year brings.
Posted by Anthony Miller at '08:18'
There’s just ten days left for you to submit your registration for the fourth in our series of Little British Battler events, to be held in London on Wednesday 23rd April 2014.
Posted by HotViews Editor at '07:19'
The advent of cloud and SaaS models has made technology buyers rethink not just product purchases but the supporting services that go alongside. That’s also made vendors consider how to best serve their clients in this on-demand world.
One of the things that buyers love most about SaaS is that it frees us from the world of long-term maintenance contracts, letting us choose and buy in a way that feels more instant. But for most enterprise roll-outs we still need to buy services. And yet Services as a Service - not really seen that.
Now blur, with its upcoming 4.0 release, is changing those buying habits too. blur delivers a simpler, faster and more efficient buying - and selling - experience for services, whether it’s the ad-hoc project to ‘get something done’ or the longer term implementations that are traditionally characterized by long procurement processes and even longer overruns.
blur 4.0 showcases why services commerce is simply about buying and selling services online. The new version of the platform provides a unified experience regardless of browser or device. The ability to start a project while on the go - from the offsite meeting with CTO to the commute home, and then run the project from anywhere, makes s-commerce universal.
The new framework on which 4.0 is based also makes it easier to integrate and develop additional functionality for buyers and sellers - from instant insight into live projects, enhanced pitch previews and improved project management and collaboration. Now you really can move away from traditional, lengthy and fat procurement models into the transactional buying of services, using a platform that’s designed for the enterprise.
You can gain insight into how blur 4.0 can change your services buying by visiting the public page preview from the main site at www.blurgroup.com or by going directly to preview.blurgroup.com. There are feedback mechanisms ahead of the full release in April so tell us what you think.
Posted by blur group at '00:00'
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