Friday 21 November 2014

Transforming Potteries Policing

Satffordshire Police logoThe announcement that Staffordshire Police is looking for a ‘game changing' level of transformation chimes with the points we raise in our recent UK Police SITS: Market Trends & Supplier Landscape 2014-15 report.

In the report we highlight that police forces are yet to embrace transformation and instead prioritise back office savings. Staffordshire provides clues to SITS suppliers how police forces will look to balance the needs of saving money while retaining the frontline.

Staffordshire is looking for technology to enable staff to be more visible in communities across Stoke-on-Trent and Staffordshire. The force is looking to provide ‘a better customer experience’ which might raise eyebrows but suggests the police force is looking to change the underlying culture of the organisation.

The overarching objective appears to be for the SITS supplier to deliver ‘a one system approach to public services across Staffordshire’. The approach encompasses not only utilising analytics to anticipate where crime will occur but also for the force to be able to collaborate with other public services to understand the underlying issues.

Joining forces with other public sector bodies is certainly a worthy goal but the public sector does not have a good track record of delivering such projects. Staffordshire acknowledges that this will mean all participants sharing power, resources and responsibility.

The eventual contract value is anticipated to range between £150m and £200m. SITS suppliers will have to juggle the requirement to upgrade the day to day ICT environment with the longer term ambitions of the force. Suppliers will not only need to have expertise in transforming organisations but also the ability to manage partnerships among disparate groups.

Posted by Michael Larner at '09:49' - Tagged: police   transformation  

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Friday 21 November 2014

The curse of ISIS!

logoA couple of months ago, London-headquartered private equity firm ISIS Equity Partners signalled it was going to change its name for pretty obvious reasons, and has just unveiled the new brand, Living Bridge.

Managing partner Wol Kolade explains that “Living Bridges are bridges that are often centuries old and handmade from the roots of living trees … they continue to grow and self-renew and in doing so become even stronger over time …  a perfect analogy for what we aspire to achieve with the businesses we back”.

I'm not sure it ‘does what it says on the tin’ but undoubtedly better than the name on the old can!

Posted by Anthony Miller at '08:52' - Tagged: branding  

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Friday 21 November 2014

Tech Mahindra boosts telecoms credentials with LCC

logoThey may style themselves as a ‘specialist in digital transformation, consulting and business re-engineering’ (see Tech Mahindra picks up pace and profit), but Mumbai-based IT services firm Tech Mahindra’s colours are still very much nailed to the telecom sector’s mast.

QED, Tech Mahindra’s largest acquisition since it subsumed the late - and in part lamented - Satyam, being that of Virginia-headquartered wireless network services company Lightbridge Communications Corporation (LCC), at an enterprise value of $240m. LCC has revenues of around $400m and employs over 5,000 staff in more than 50 countries, including the UK.

This all looks perfectly reasonable in the context of Tech Mahindra’s core telecoms services, which currently comprise just over half its $3.4bn (run rate) revenues.

Was a company of two halves, is a company of two halves, and looks like will always be a company of two halves.

Posted by Anthony Miller at '08:31' - Tagged: offshore   acquisition  

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Friday 21 November 2014

Corero investors dig deeper

logoTroubled network security appliance supplier Corero Network Security (CNS) is to raise a further £4.5m cash to try to bridge the gaping hole left by lower than expected revenue from its previous generation product (see Corero’s woes continue). CNS will place 30m shares at 15p (a 5% premium to last night’s close) of which nearly 40% will go to chairman Jens Montanana, who is also to loan the company £450k. Famous quotes involving ‘holes’ and ‘digging’ rather spring to mind.

Posted by Anthony Miller at '08:00' - Tagged: fundraising  

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Thursday 20 November 2014

Yahoo steps into Google's place in Firefox

LogoYahoo has replaced Google as the default search engine on Mozilla’s Firefox browser in the US, bringing an end the 10 year agreement between Google and Mozilla.

With Google pushing Firefox competitor Chrome, and Mozilla developing its own mobile operating system to compete with Google’s Android, it may have been that the direct points of competition were becoming too tricky to handle so Mozilla opted for a less fraught relationship. There again, Google could have instigated the break. The end result is a major break and Mozilla is no longer aligned with the search market leader.  

For Yahoo it is another twist and turn in its efforts to get itself back on track and aligned with a clear performance-producing direction (see the HotViews archive here and work back). Part of this is trying to reassert itself again in the search engine market. There are further consequences as Yahoo may look to extricate itself early from its agreement with Microsoft whereby Yahoo search is powered by Bing, but that would require major re-investment by Yahoo.  

If the relationship between Yahoo and Mozilla stops at default search engine provision it will be a disappointment because there is scope for much closer integration and different ways to explore how to use the rising volumes of connected digital data. Yahoo is due to release its revamped search engine design in December so we’ll look to this for early indications of how the five year Yahoo/Mozilla partnership might play out.   

Posted by Angela Eager at '10:17' - Tagged: partnerships  

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Thursday 20 November 2014

Confidence not yet returning to eServGlobal

esgThe shares of eServGlobal, providing mobile financial services in emerging markets, have recovered from their October worst, see here, where the latest fall was precipitated by some ill-timed share transactions by the CFO. However, the market is giving the company little credit for the work done in the year to the end of October.

During the year eServGlobal agreed the sale to MasterCard of the majority stake in the flagship HomeSend joint venture. MasterCard is now beginning to push HomeSend as the centre-piece for its plans to grow in the remittances market. eServGlobal which holds 35% of HomeSend has also been able to make its white label transaction hub available to very large numbers of mobile subscribers. The reach of this platform has been expanded through additional contracts with international mobile operators and remittance specialists (e.g. in the Middle East with Zain Group and in Kenya with Xpress Money and Safaricom)

The Trading Update reveals that revenue for the year will be in the range of AUD$30-32m or c.£17m. (ESG is listed on both AIM and Australian markets), representing a flat performance over the year and well down from broker estimates published in June. EBITDA for the year is predicted to be in the range of AUD$2-5-3.5m, which the management suggests is in line with earlier expectations.

Although revenues are flat, the management point out a number of contracts signed after the year end and the improved margin achieved in the second half. This is likely to be viewed cautiously by investors who have seen too often the effect of delay. The return of confidence will take time, as will a flow of good news and more evidence of how the MasterCard and other deals add volume, subscribers and lasting value to the group.

Posted by Peter Roe at '09:49' - Tagged: mobile   payments  

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Thursday 20 November 2014 reduces losses but disappoints on guidance

LogoThe weight of expectation is being felt at as shares dropped 4% in after-hours trading following the release of Q3 results, due to guidance coming in just short of market expectations. Overall growth in Q315 (to October 31 2014) was slower YoY and QoQ, demonstrating the problem of maintaining high growth from a large base. However, revenue was still up an impressive 29% to $1.38bn, with deferred revenue up 28% to $2.22bn. In the year ago quarter revenue saw 36% growth, aided by the big ExactTarget acquisition (see here), and it was up 36% in Q215 (see here).

Operating expenses are still bloated but represented 78% of total revenue in the quarter, down from 84% in the year ago period. A reduction in the net loss from $124.4m to $38.9m was a welcome change in direction too. The company seems to recognise growing concerns over the rising level of losses but is still committed to growth over profit so it remains to be seen whether this reduction in losses and operating expenses will be sustained, meanwhile cash generation was down 11% so the performance levers are not all aligned.

There is still plenty of business out there for and its pure play peers – indeed continues to report growth in 7 and 8 figure deals.  What is more telling is that international business (where the company is underweight) is growing – a year ago Europe and Asia-Pac represented 30% of total revenue, now it is 34% and with new non-US data centres coming on stream, it has something to kick off from to feed it need for growth. 

Posted by Angela Eager at '09:18' - Tagged: results   cloud   software  

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Thursday 20 November 2014

Regulator bares teeth over RBS IT resilience

rbsToday the Financial Conduct Authority (FCA) has fined the banks within the Royal Bank of Scotland group the rather modest sum of £56m for the failure of its IT systems in June 2012. This occurred when a batch scheduler for a legacy system failed and brought the whole system to a standstill. This issue and other problems surrounding legacy systems were covered in our report Hot Topics and Opportunities in the Banking Sector, available to FinancialServicesViews subscribers here.

fcaOver the past year the regulator has been demanding greater assurances over the performance of financial services computer systems to avoid similar incidents. In our many interviews with banking IT services suppliers and with the banks themselves, we have seen the increasing importance of resilience in capital investment plans. Looking ahead into 2015, this will continue to be a major feature as banks and insurance companies work to build adequate systems and controls to manage their exposure to IT risks.

This move towards greater control is having further effects on the buying behaviours of the major banks, accelerating the progress towards supplier consolidation and moves towards standardisation. Our interviews have unearthed several dramatic plans to slash supplier numbers, providing significant opportunities for companies, particularly the India centric suppliers, to build share of wallet and grow at rates well above the sector average. There is also a somewhat faster move to buy off-the-shelf solutions, moving cautiously away from customised approach. This is providing some opportunities for the software suppliers such as SAP, Misys, Finacle (Infosys) and Temenos.

Although the fine is small in relation to those levied on regulatory misbehaviour, it may provide additional momentum to spending trends across the banks over the coming year.

Posted by Peter Roe at '08:52' - Tagged: legacy   banking   regulation  

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Thursday 20 November 2014

Insurers use CGI to check driving licences

cgiCGI has announced a multi-year contract with the Motor Insurers’ Bureau (MIB) to provide an industrywide hub enabling insurers and brokers to check driving licences. This MyLicence service will allow members to check on things such as accumulated penalty points and disqualifications when customers ask for quotes. The use of the service should ensure more accurate pricing and lower costs when providing quotations and faster settlement of claims. It could also reduce the cost of insurance to the end user, which is another good thing.

This deal builds on CGI’s relationship with the MIB where it already runs a hub for cross-industry queries. The use of the MyLicence hub will also facilitate the addition of new services and access to additional databases (such as for No Claims Discounts in 2015), thereby providing a higher level of operational benefits to users at low incremental cost. As usage of the system grows, this should provide additional revenue and good long term margin to CGI which is building a strong position both in insurance and in the supply of shared service hubs.

As financial services companies wrestle with the issues of greater competition and pressure on margins, we believe that they will increasingly look to the use of shared services to reduce costs, to exploit the greater availability of technology and data and to serve the expanding number of counterparties and channel partners. The MyLicence deal provides a good example of the benefits of such an approach.

The issues of increased cross-industry collaboration and the drive towards improving operational efficiency were two of the issues covered in our report on Hot Topics in Insurance published earlier this year and available to FinancialServicesViews subscribers, here.

Posted by Peter Roe at '08:40' - Tagged: shared+services   insurance  

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Wednesday 19 November 2014

Cognicity Challenge: Getting the Smarts for Cities

cwAlongside the excellent work in fostering FinTech, the wider Level39 technology accelerator (part of the Canary Wharf Group) has launched the Cognicity Challenge. This is aimed at companies developing “smart cities” technology, with six challenges laid down in Sustainable Buildings, Integrated Transportation, Connected Homes, Virtual Design and Integrated Resource and Building Management. Not only is there a cash prize, but the winners in each category will be able to pilot their technology in the next phase of the Canary Wharf development (see photo).

Over the next few years, as the Internet of Things rolls out at an increasing pace, we will see lots of change in our working and home environment. This will lead to the development of connected organisations, systems and processes to make our cities and homes work better. An exciting area and the Cognicity Challenge looks like a great way to spin the flywheel.

Posted by Peter Roe at '09:08' - Tagged: innovation   iot   SmartCity  

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Wednesday 19 November 2014

Innovate Finance – a growing force in FinTech

ifIn August we reported the launch of Innovate Finance, in London’s where it’s at for FinTech. In the three months since then this membership-based organisation has doubled its original roll of 54 members, with roughly half of them being start-up companies. Innovate Finance brings together the start-ups with their potential customers, partners and investors, with the founding members including five major UK banks, an insurer and two credit card operators, as well as IBM, Monitise and SWIFT.

The organisation seems to be getting its message across in terms of the importance of innovative technology in the Financial Services industry. Already Innovate Finance has run roundtables or projects for the Government, the Treasury and the regulators (e.g. the FCA and the new Payment Services Regulator). We should see a lot more of this organisation and its member companies in 2015 with more roundtables and events, such as at the Guildhall in March exploring some key themes in FinTech and participating in London Technology Week 2015. We would also expect to be writing about many of the start-ups in UKHotViews as they raise finance and make the next steps in building successful businesses.

Across the Financial Services sector, customers are demanding more and new competitors with challenging business models are shaking up incumbents like never before. Lasting success will depend on the ability of companies to harness and implement some of the technology and energy being surfaced and developed by organisations like Innovate Finance. Throughout 2014 TechMarketView has been pushing the theme of “Race for Change” and as we move into 2015 the large, complex financial services incumbents, as well as their customers and SITS suppliers will increasingly have to ask themselves whether they really have the ability to embrace innovation and effect real change.

Posted by Peter Roe at '09:04' - Tagged: financialservices   innovation  

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Wednesday 19 November 2014

Royal Mail suffers increased competition

RMWe wouldn’t normally report on Royal Mail (RM) who this morning announced a profits fall of 21%. But one of the main reasons RM cited was the entry of Amazon into the parcel’s delivery business in the UK. A ‘double-whammy’ as Amazon had been one of RM’s largest clients and is now a competitor. Amazon seem to have grabbed 2-3% of the UK parcel’s market in as many months. On top of that rival firms like DPD and TNT have launched mail delivery services in major cities.

The rapid growth of online shopping had seemed like a great opportunity for RM. At the time of the IPO last year RM was forecasting growth of c6% in that area. Now they are talking 1-2%. Amazon is a formidable foe which basically puts growth ahead of profits – indeed Amazon hasn’t madDoddlee any real profits for many years. They are out to buy market share and if competitors suffer or fail as a consequence…Well, tough. RM really can’t afford to adopt such a policy.

On top of that the whole online delivery market is going through another major upheaval as ‘Click & Collect’ is in the ascendancy. Most of the major retailers now have such a service – using Clicks & Bricks to their advantage. Eg - when ordering from John Lewis you can pick up at any Waitrose. I’ve got to know Lloyd Dorfman of Travelex fame due to our mutual association with the Prince’s Trust. Dorfman is the Chairman of Doddle - a recently formed JV with Network Rail. Doddle intends to open 300 parcel collection points at railway stations.

The attraction is obvious. Customers do not get those dreaded ‘Whilst you were out…” notices through their letter boxes and the retailers have a much cheaper delivery system. Railway stations seem an obvious and convenient collection point. Failed/re-deliveries are very expensive. But all this puts Royal Mail’s future growth into even more doubt. Seems whatever sector you are in, the Age of Disruption is certainly with us all.

Posted by Richard Holway at '08:02'

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Wednesday 19 November 2014

Profits blurred further at blur

logoYou have to skip over the hyperbole in the first two paragraphs of today’s trading update from loss-making, UK-headquartered services e-commerce marketplace, Blur Group, to get to the nub of the matter in the third – which is the profit warning.

It was left to new CFO Stephen Harvey – appointed in September – to break the news that “a small number of large projects … will not kick off until early 2015” and so hit 2014 revenues and profits.

Now here’s the thing. Harvey alludes to a total of 6,329 projects having been submitted to the marketplace “representing a combined value of $310m”. Yet a delay in just a ‘small number’ of them has thrown the year out of kilter – this, for a company whose half-time revenues were under $6m.

In almost the same breath, Harvey confirmed “all indicators that EBITDA breakeven will be achieved in Q4 2015 along with positive cash flow from Q1 2016”.

I can only suggest you look at our prior commentary on blur (start with Blur – small print clearer but profits not and work back) and take your own view on the confidence levels supporting Harvey's predictions.

Posted by Anthony Miller at '08:01' - Tagged: warning  

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Tuesday 18 November 2014

MoD: The last bastion gives in to BYOD

MoDJust two years ago, the deputy head of service operations for the Ministry of Defence, Simon Wise, was quoted as saying that ‘Bring Your Own Device’ (BYOD) schemes wouldn’t offer the same benefits to the MoD as to other organisations because of the security measures it would have to put in place on devices. He essentially ruled out MoD civil servants and service personnel being able to use their own technology, because the technology’s benefit would be diminished by the security implementation.

When we researched the topic last year – see BYOD in the public sector – it appeared that the MoD was the last bastion of BYOD avoidance in the public sector. But even then, we highlighted that there was a risk involved in not investing in user and situation appropriate technology. Although getting old now, I still refer to the fact that military personnel started widely referring the military communications system, BOWMAN, as ‘Better Off With Map And Nokia’. The danger was that by not taking advantage of the communications technology integrated with the HQ and the Battlefield, the personnel were unable to benefit from all the information available all the time.

Moreover, increasingly military personnel have become frustrated with the technology available to them. Perhaps it should come as no surprise then that just two years since Wise’s comments, the FT carries a story saying that plans are in place to allow the use personal mobile devices to access some work-related MoD functions via a secure web browser. First off will be HR systems; they are likely to be followed by training and language applications. Limiting BYOD by ‘type of use’ is a common approach across all of the UK public sector (and more broadly), not just the MoD; the more narrow-based the focus, the easier the BYOD solution is to implement. The MoD will reduce a lot of time and frustration by focusing on these widely used applications.

Posted by Georgina O'Toole at '09:45' - Tagged: public+sector   defence   BYOD  

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Tuesday 18 November 2014

Obillex – factoring in a new model

logoGiven the state of the lending market and the slow response times of the major banks, SMEs are likely to be grateful for any moves to improve their access to finance and lower interest rates. They should therefore be pleased that Obillex has just secured £3m of funding from Dawn Capital, working with MMC Ventures.

Currently, companies that are supplying large corporates or government organisations have to find finance while they wait for the buyer to cough up. This finance can be at high rates, hard to get and a constraint on growth.

With Obillex’s proprietary platform the supplier is linked to capital markets investors and their ready cash so that he can opt to be paid quickly. A government regulated trustee then settles up between the investors and buyers. In this way, the supplier gets his money early and access to working capital funding at rates nearer those of the larger corporates. The investors receive a return linked to the interest rates of the larger corporate with lower risk as their exposure is against the larger corporate, not the individual supplier.

London and Dorset-based Obillex generates revenue by charging the investor a percentage of the original invoice value and addresses the potential market by integrating the service with the propositions of e-invoicing suppliers. A new “digital” model for factoring and an innovative and interesting approach to lubricating supply chains.

Posted by Peter Roe at '09:27' - Tagged: funding   payments   financing  

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Tuesday 18 November 2014

Eyes on Eagle Eye

LogoWe haven’t covered UK-based Eagle Eye before but its pre-AGM trading statement this morning caught our eye. Eagle Eye (April 2014 IPO) provides SaaS solutions for digital consumer engagement in the retail and hospitality sectors, including its transaction AIR platform which uses beacons to deliver real time digital vouchers, tokens, and real time offers to consumers.

Eagle Eye is in a fast developing market with touch points into many of the high growth areas of the SITS market such as mobile, customer engagement and payments. Regular readers will remember Little British Battler TagPoints who also operated in this fast moving field and was rapidly acquired (see here) on the back of its technology, impressive customer base and growth. Eagle Eye has collected a similarly impressive set of high street brand name customers for its AIR platform and now has over 100 running live (vs. 90 in June), and the company pulled in £1m+ revenue in Q1 which was ahead of expectations. With a recent acquisition under its belt – mobile coupon provider 2ergo – plus the IPO, and its position across several high growth sectors, 2014 has been a break though year for the company so we’ll be keeping our eyes on Eagle Eye from now on.  

Posted by Angela Eager at '09:25' - Tagged: software   tradingupdate  

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Tuesday 18 November 2014

Poor marks for DRS

LogoThe poor situation flagged up by the H1 results has not improved and 10 months into the financial year DRS Data and Research Services is taking cost cutting measures on the back of diving revenue in both its business segments. Total revenue was down 15% to £14.9m and within that education dropped c10% but non education (election and census) plummeted 52%.

The election and census side of the business is unpredictable and there have been no major projects for DRS this year, while education is still suffering from changes in the UK exam structure that DRS highlighted earlier in the year (see here) and lower international demand for its traditional education products. The severe drop is international education revenue is a blow for DRS as this is an area it has been investing in, in the form of its e-Marker assessment product, but these numbers indicate its traditional education business is declining faster than the new product is growing.

Posted by Angela Eager at '08:42' - Tagged: software   tradingupdate  

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Tuesday 18 November 2014

Facebook moves another step closer to MyTop

fbmtBack in Sept 2007 I wrote an Open Letter Dear Mr Zuckerberg – MyTop it could be YOU! Earlier that year I had introduced the world to MyTop – basically a web portal that would be your one-stop home social media landing stage. Crucially it would combine both your home and business worlds. I thought, even then, that Facebook had the best model for this. But seven years on, Facebook is still really only for your personal – not business – stuff. And nobody else has created anything practical that merges the two worlds.

But yesterday reports of ‘Facebook at Work’ emerged. Basically allowing you to use all the features of FaceBook in a work environment but keeping these separate from your personal stuff. In other words, your work colleagues couldn’t see those funny pictures of your cat and your friends couldn’t eavesdrop on your work banter. Facebook for work will also allow work document sharing etc. Indeed almost exactly the MyTop model unveiled seven years ago.

Personally, I think FaceBook is on to a winner here. There is a real need for a product/service like this. Just wish Zuckerberg would share some of the spoils with me.

Posted by Richard Holway at '08:21' - 1 comment

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Tuesday 18 November 2014

Another troubled day for Quindell

QMy Knowing ‘right’ from ‘wrong’ post yesterday got wide spread support/praise. Clearly most of our readers share our moral compass. The only comment at odds with that came from a reader who said that I’d been ‘conned’ and that Quindell was only using a standard method for investments banks to finance their long positions’. Taking lessons in what's right and wrong from investment banks is an interesting concept.

Events at Quindell have moved swiftly since I wrote the post on Sunday night. First, as we reported in a post script, yesterday morning it was revealed that Canaccord, Quindell’s NOMAD, had in fact resigned on 21st Oct. Quindell could have made that public at or before the directors share transactions were announced. But hid behind the letter of the law as they only technically had to reveal it when the resignation became effective.. This latest bit of Quindell-speak, sent the shares crashing by a massive 34% yesterday to close at 45p. Quindell’s market value has plunged by over £2b since April 14

Then Sky News last night broke news (now confirmed in an LSE announcement)  that founder and Exec Chairman Rob Terry had been ousted. Another bit of Quindell-speak as Terry will remain as a paid consultant. FD Laurence Moorse will ‘step down at the 2015 AGM and leave a year later’. In other words, the two people behind the current debacle will be around influencing Quindell for quite some time to come. Mind you, Terry has considerable ‘form’. I commend you to read the FT’s Quindell’s troubles put founder Rob Terry’s past in the spotlight.  

The issue is not just confined to Quindell. Many tech companies are quoted on AIM and its reputation is now being seriously questioned. We need a tech industry that does know right from wrong – not one that plays the system to its personal advantage.

Posted by Richard Holway at '07:35'

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Monday 17 November 2014

*NEW RESEARCH* UK Education SITS Market Trends & Supplier Landscape 2014-15

Front Cover education reportAs the UK education software and IT services (SITS) supplier market evolves, a long heritage will not guarantee future success. As cloud services are more widely adopted and new entrants clamour to make their mark, the leading players cannot rest on their laurels.

Subscribers to TechMarketView’s PublicSectorViews research stream can read our analysis of the changing education landscape in our new report, the UK Education SITS Market Trends & Supplier Landscape 2014-15, available for download from today.

The report reveals the Top 10 suppliers to the education market in 2014 and their performance and prospects in the sector, as well as the up and coming suppliers that shouldn’t be ignored. Report author, Michael Larner, also outlines how the market is changing; ICT is playing an increasingly central role in both schools and higher/further education institutions and is more and more integral to the delivery of education.

If your organisation is not yet a PublicSectorViews subscriber and you’d like further details on our subscription packages please contact Deborah Seth from our Client Services team.

Posted by Michael Larner at '12:17' - Tagged: market+trends   education   supplierlandscape  

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Monday 17 November 2014

Scisys proud of Rosetta contribution

Scisys logoIf any announcement could prove that, as a company, you were at the heart of truly mission critical systems it has to be this one. Scisys has revealed that it was part of the European Space Agency (ESA) team responsible for the touchdown of the Rosetta mission’s lander, Philae, on comet 67P/Churyumov Gerasimenko on 12th November. Scisys contributed directly to the mission by developing the mission control system used by the European Space Operations Centre (ESOC) to command the Rosetta spacecraft and process its telemetry. Indeed, Scisys has supported and maintained the MCS for the last ten years since Rosetta was launched in 2004.

Rosetta comet landingIn Scisys last reported financial period (six months to 30th June 2014 - see Scisys continues to improve the bottom line), the Space business, which has been providing integrated solutions, systems and services for ground and on-board systems for the last 30 years,  accounted for 44%, or £9.3m, of Scisys’ turnover. This was a 4% reduction in turnover compared to H113 and highlights the unpredictability of the space business, due to the nature of large space programmes. Moreover, the space business contributed the lowest margin of all three Scisys divisions (at 17.9%). But it is the business which best highlights Scisys positioning as a provider of mission critical systems to its clients. And, as Dr Horst Wulf, Scisys’ Space Divisional Director says: “for many of us Rosetta is a career defining moment and when the time is right to look back on our professional lives it will unquestionably be one of the highlights”.

Posted by Georgina O'Toole at '09:42'

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Monday 17 November 2014

Redcentric wraps up a convincing H1

redManaged services player, Redcentric, has notched up good organic growth of 11% for the six months to the end of September. Revenue came in at £46.8m, with adjusted EBITDA increasing to £10.1m - up 32% organically. The company was formed following the demerger from Redstone in 2013 (see here) and the subsequent reverse takeover of InTechnology (see here).

Top line growth has been underpinned by managed services contract wins. New wins in the period include a £3.1m with a “major London based estate agency”, and a £1.5m deal with “one of the largest UK vehicle rescue and recovery operators”. Meanwhile, improvements to the profit line have occurred as a result of benefits from the integration process, but also an improved revenue mix (i.e. more managed services wins) and the company’s ability to leverage its offshore resource.

Redcentric - which provides services including network, hosting, cloud, and unified communications - plays in the hugely fragmented mid-market area. As such, it bumps up against a whole raft of other suppliers including IBM, Rackspace, Six Degrees, Computacenter and KCOM. The company’s focus is organic growth, but further acquisitions are likely to feature going forward. Having undertaken the takeover of InTechnology, management is indicating that M&A activity in the near-term is going to be focused around smaller, bolt-on purchases that add capability.

Posted by Kate Hanaghan at '09:41' - Tagged: results   cloud   networkservices   managedservices  

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Monday 17 November 2014

Shuttlecook hopes for right recipe for dinner delivery

logoThe only reason I wanted to bring to your attention the launch of London-based cook-at-home food delivery service, Shuttlecook, is because of the remarkable honesty of Dinnr co-founder Michal Bohanes, as reported in the excellent TechCrunch.  Dinnr was a similar service that went belly-up (so to speak) early this year, with Bohanes’ valedictory blog commenting that the model was a “classic case of a solution looking for a problem”. A ‘sage’ observation - and food for thought - for all MOWMAT (Meals-On-Wheels Masquerading As Tech) startups.

Posted by Anthony Miller at '09:22' - Tagged: startup  

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Monday 17 November 2014

BT staying loyal to Global Services

logoAs a thirty-year follower of BT Group (working on the privatisation, covering them as an Investment Analyst then an employee for 12 years – and a long term shareholder) it was interesting to read the Sunday Telegraph article about another potential de-merger or sale of Global Services. The paper published a denial of any plans, with the BT spokesman adding that “the division is a much improved part of the business and that we are pleased with the continued progress it is making”. Reportedly, management had recently discussed (and dismissed) a sell-off but that many shareholders would welcome a move to separate the businesses.

If BT had wanted to sell Global Services (to raise cash for TV and Broadband?), finding a candidate with upwards of £8bn to spend, a strong balance sheet and considerable patience would be difficult. It would also be an exceptionally brave Private Equity firm that would take such a move on. A de-merger would not bring any new cash into the business and would be very difficult to execute.

Keeping Global Services as part of the BT Group is clearly in the best interests of shareholders; diversifying network traffic and profit sources, providing access to international markets and opening opportunities in IT services, Cloud infrastructure and our increasingly connected world.

But in our view the reported decision to keep GS needs to be followed by greater investment in value add and relevance in vertical markets. GS’s improvement over recent quarters has largely been down to cost cutting and greater financial control with some international expansion, see here. The division is now expecting additional benefits from cost (and system) transformation but we would also look for a bolder and more expansion-minded approach as management moves more assuredly to realise this division’s potential.

Posted by Peter Roe at '09:19' - Tagged: cloud   services   network  

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Monday 17 November 2014

Tern turns

logoIn truth, I should have said ‘Silvermere turns’ but the alliteration is not nearly as good. You see, Silvermere Energy was an AIM-listed oil and gas exploration company which threw in the towel last year after losing £5m in 2012 with zero revenues (i.e. no oil). After disposing of the legacy bits, Silvermere resurfaced in August 2013 under new management as Tern, a cash shell housing a tech investment vehicle.

Tern made its first investment in November 2013, paying £100k for a 1% (yes, one percent) stake in  Flexiant, the Edinburgh-based ‘cloud orchestration’ software firm spun out of web hosting firm Xcalibre Communications after the business was sold to peer Webfusion back in December 2009 (and see Angels believe in Flexiant).

Since then, Tern has made 1% investments in two other startups (Push Technology, Seal Software) and acquired 95% of privately held data security software company, Cryptosoft, with a £300k investment. Cryptosoft “had no profits or losses in the year to 31 March 2014 and its assets are £28,000 capitalised software”.

I have to say I don’t quite follow Tern’s investment strategy, which it claims is focused on “IT companies with proven technology, commercial track record and significant cornerstone customers”. Anyway, according to today’s trading update, Tern’s investments are progressing ‘in line with expectations’ – but I suppose that rather depends on how high you set your expectations.

Posted by Anthony Miller at '08:58' - Tagged: trading  

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Monday 17 November 2014

Serco chairman resigns

lThe bad news just keeps on coming for embattled Serco.

Chairman Alistair Lyons has now announced his resignation, just a week after CE Rupert Soames decided to pull the plug on Serco’s private sector BPO business, announce a £1.5bn write-off, seek capital raising, and then see its shares go into freefall (see here). Serco’s shares are now almost 50% year to date.

Soames pointed out that Lyons has ‘done an outstanding job stewarding the company through the travails of the last twelve months’ and that ‘nobody could have worked harder or done more’. Lyons has been chairman since May 2010, so was at the helm during the ‘dark days’ that set Serco’s current crisis in motion, and for which he said he takes ‘ultimate responsibility’.

Lyons will now stay with Serco until a replacement is found during H115. The new chairman will have to preside over a big cultural change taking place across Serco as it becomes a B2G (Business to Government) only organisation. A strong track record in public sector outsourcing will surely be a must for Serco's next chair.

Posted by John O'Brien at '08:38' - Tagged: public+sector   bpo   bps  

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