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Learning Technologies Group (LTG) has released its full year results for FY23 (ended 31 December 2023). Revenue for the year was down 2% in constant currency to £562.3m, with adjusted EBIT down 1% to £98.5m – both in line with expectations but slightly better than the indications given (revenue “not less than £560m” and Adjusted EBIT of £98m) in the company’s trading update in January (see LTG FY23 revenue down, margins flat - but H2 showed improvements).
As we commented in January, H1 2023 was dominated by efforts to bring LEO Learning (created by LTG in 2014) and GP Strategies (acquired in 2021) together to form its GPLX division – see LTG H1 results flat as GP Strategies acquisition continues to embed. That work that reportedly resolved at the start of H2, with LTG also further streamlining operations by integrating Watershed into Rustici Software (acquired in 2018 and 2016 respectively), and Reflektive into Bridge (both acquired in 2021) over the course of the year.
LTG began a temporary pause on bolt-on acquisitions in FY22 (a stance which continued into FY23), to enable it to focus on bringing more coherence to its portfolio. In addition, the company has also been disposing of non-core offerings, with the sale of Lorien Engineering Solutions completing in January 2024.
The company expects 2024 revenues to be in line with FY23 (after disposals) but has confidence that its “strong cash generation” performance (LTG reported record net cashflow for FY23 of £79.5m) will enable it to return to its pursuit of “value-accretive acquisitions” during 2024. However, LTG’s Board has revised its medium-term targets, concluding that “the 2025 goal to achieve run-rate revenues of £850 million and £175 million run-rate adjusted EBIT is no longer appropriate”.
Posted by: Craig Wentworth at 09:44
Tags: results
AIM-listed SME payment platform provider, Equals Group plc, has published its latest annual results, revealing a year of strong growth for both revenue and profitability. Revenue for the twelve months ended 31 December 2023 was up 37% to £95.7m whilst profit after tax more than doubled to reach £7.7m.
Underlying transaction values saw Equals’ Solutions Platform deliver the strongest growth, up 118% to £4,368m. Meanwhile Banking transactions were up 25% to £2,178m and FX rose by 7% to reach £5,866m.
Alongside the publication of the annual results, Equals also issued an update on the progress of H1 24 up to 12 April. The statement revealed that YTD revenue had increased by 30% to reach £31.9m and that revenue from Solutions was already up by 74% at £13.2m. As at 12 April 2024 Equals held total cash worth £21.6m.
Equals vision is the simplification of global money movement for business customers which it delivers via its B2B platforms, Equals Money (for SMEs) and Equals Solutions (for larger corporates). In part the company’s current success has been fuelled by its previous investments in its technology, including multi-currency IBANs and bank-grade connectivity and clearance. These are highly complex and time consuming to replicate and Equals early-mover advantage appears to be paying dividends.
In March this year, Equals confirmed that it had received an indicative offer from a consortium comprising London-based fintech Railsr (Embedded Finance Ltd) and TowerBrook Capital. The bid follows a Strategic Review initiated by Equals last November and comes on top of ongoing discussions with Madison Dearborn about a possible takeover (see: Equals confirms bid interest). The interested parties have until 17 April 2024 to confirm their formal interest.
Posted by: Jon C Davies at 09:38
Tags: payments
Cambridge based life sciences startup Qureight has raised £6.8m ($8.5m) in Series A funding for its AI driven data platform helping to accelerate drug development.
Founded in 2018 and headquartered in Cambridge, Qureight is initially targeting clinical trial imaging analysis and data curation in lung and heart disease. Its platform is used by NHS foundation trusts including University Hospitals Birmingham, Royal Papworth and Guy’s and St Thomas. The company also partners with a number of Biopharma companies including AstraZeneca and Roche.
Complex lung and heart diseases, such as Idiopathic Pulmonary Fibrosis (IPF) and Pulmonary Hypertension, currently have limited treatment options and poor survival rates. Typically, high-value data from patient scans and records is stored across numerous platforms and databases in an unstructured form. Researchers must manually extract relevant data from sources for their research, an expensive and time-consuming process.
The Qureight platform allows companies to run AI based data analytics on complex trial data including images, clinical data and biomarkers. Qureight has access through data contracts across NHS England and can collect CT scans, biomarkers and other trial endpoints directly from hospitals or clinical research organisations in real-time as a complex disease drug trial progresses. This information is securely collated and structured, ready for analysis. The insights from this analysis can be used to look for drug responses and find new endpoints. The structured data can also be used to build virtual trial patients, making it easier to run AI models and compare disparate data sets.
AI is already playing a key role in drug development, allowing for the design of more resource-efficient clinical trials, the improvement of existing disease treatments, and the development of powerful new drugs.
Posted by: Simon Baxter at 09:28
Tags: lifesciences ArtificalIntelligence
Shoreham-by-Sea headquartered, Focus Group, has secured investment from new backer, Hg Capital.
After four years with Bowmark Capital (whose other investments include managed IT and cyber services provider, Little Fish), the reseller and solutions provider has now secured “significant investment” from its new backer. Hg Capital invests in software and services firms across both Europe and the US with proven expertise in bringing on SME tech companies.
Bowmark invested back in 2020, in part attracted to the excellent management team that has continued to deliver. As a measure of its progress, Focus Group has driven both double-digit organic growth alongside undertaking 21 acquisitions. CEO, Barney Taylor, joined the firm in 2021 and has had previous leadership positions at NTT Ltd (was Dimension Data) and Ensono.
Focus was founded 21 years ago and provides a range of technology offerings including workplace, cyber, telecoms, connectivity, mobile, and energy. It has around 30,000 customers, many of them smaller firms. Tech providers with a broad range of offerings are crucial to small and medium organisations that value the 'one-stop-shop' aspect. But it is much more than that. Partnering with a tech provider that is not a mega-corporate and that has an intimate understanding of SMB needs – and how tech can address their specific challenges and opportunities – can be transformational. For that reason, high quality channel players are crucial for our UK market.
We recently spoke to a group of small and medium-sized firms to understand how they’ve been working with their tech providers and how it is impacting their productivity growth. TechMarketView clients can read it here: SMB Productivity: Driving value through modernisation.
Hg currently has $65bn in funds under management supporting a portfolio of more than 50 businesses. Expect to see it invest in Focus's offering development and supporting the current trajectory in terms of both underlying and inorganic growth. Congratulations to Focus Group founders, Chris Goodman and Ralph Gilbert, on the journey so far!
Posted by: Kate Hanaghan at 09:25
Tags: investment channel SMB
AIM-listed construction SaaS specialist, Eleco has bought Romania-HQ’d software developer Vertical Digital. The terms of the purchase, which was made by the company’s Elecosoft Ltd subsidiary, consist of an initial consideration of €1.3m and an earn out of up to €250k payable in 2026. The deal, which is being financed exclusively by internal cash resources, aims to enhance the platform providers systems integration and implementation capabilities.
Founded in 2017, the acquired services firm comprises Vertical Digital SRL and Sons of Coding SRL. The group provides agile software development, technical consulting and upskilling solutions to European and multinational end-customers. Vertical Digital’s clients include Lufthansa Technik, PwC, VW Financial Services, Deloitte and Zoopla. Last year the company delivered revenue of €1.2m and a net profit before taxation of €0.3m.
Eleco has been making good progress over the last couple of years on its strategy to move to a customer-centric, SaaS-based business model (see here). According to its most recent trading update, the company is on track to deliver yoy revenue growth of 11% for the twelve months ended 31st December. Acquisitions are playing a significant role in the reshaping of the enterprise. Last year Eleco bought BestOutcome, a UK provider of Project Portfolio Management (PPM) software. The purchase of near-shore developer Vertical Digital should now enable the London-HQ’d company to both further extend its offering and augment its internal R&D capacity.
Posted by: Duncan Aitchison at 09:25
Tags: acquisition saas software construction nearshore
The results of an independent review have exonerated Swiss banking software provider, Temenos, following unsubstantiated accusations made against it. The move follows an attack launched on the company by prominent short-seller, Hindenburg Research. The most serious of Hindenburg’s accusations related to alleged accounting and revenue recognition practices, whilst the firm has also sought to highlight a number of implementations and partnerships that have faced significant challenges.
In response to Hindenburg’s mudslinging, the Temenos board issued a strong rebuttal, reaffirming its belief that the company is running a sound business with robust financial controls. Alongside this statement Temenos also commissioned the independent third-party review retaining the services of Alvarez & Marsal, a leading global professional services firm, with expertise in forensic accounting and investigations, Schellenberg Wittmer as Swiss counsel and Sullivan & Cromwell as US counsel. The Temenos Board has also formed a Special Committee led by Thibault de Tersant to support the investigation (see: Temenos commissions independent review).
The independent review saw investigators granted unrestricted access to Temenos executives, personnel, records and communications. More than 300,000 documents and electronic communications were analysed and interviews were conducted with various current and former Temenos employees. In total, over 150 attorney and forensic accounting professionals have spent over 22,000 hours investigating the allegations. The unequivocal findings of the independent review are that Hindenburg made incorrect and misleading allegations about Temenos and its accounting, products and customer relationships and presented purported facts about Temenos in a distorted manner or out of context.
The news that the independent review had dismissed the Hindenburg allegations accompanied the publication of the Temenos annual report, with the Board and audit committee confirming that all previously published financial statements fairly represent Temenos' financial position, results of operations, and cash flows. The full report, detailing the independent review and its findings, have now been made public and interested parties can view or download them here.
Having been the victim of a campaign of mischief making by small number of activist investors since 2022, the Temenos board will no doubt be hoping that its swift and transparent efforts to dispel Hindenburg’s unfounded allegations will be the end of the matter. Of course it remains to be seen whether those few that are agitating for change at the top of the company will now fall silent.
Posted by: Jon C Davies at 09:03
Tags: banking Temenos
More activity on the UK Lawtech front with London-based Lawhive raising £9.5m in a seed funding round led by Google Ventures with participation from Episode 1 Ventures. This follows the £1.5m it raised back in 2022.
Lawhive was founded in 2021 and is targeting the ‘high street’ or consumer legal market, an area that is relatively under served by Lawtech, which to date has typically focused on the B2B / corporate legal space. Lawhive operates a legal network pairing prospective clients with lawyers designed to save consumers money. It currently claims to work with 100 UK-based lawyers and says fees are up to 60% cheaper than traditional firms. Its ‘Lawrence bot’ is designed to summarise evidence, draft letters and court applications and automate mundane work typically done by a paralegal or junior lawyer. A professional lawyer vets any final legal advice.
The high street legal market is extremely inefficient with lots of small firms offering services that have not changed much in decades. Whilst it is ripe for disruption its fragmented and commoditised nature and lack of brand awareness within operators poses challenges for any new market entry. Given the challenges, having Google as an investor should only help.
Lawtech remains an incredibly vibrant market for UK start-ups and scale-ups with VC money following the logic and potential value of automating expensive legal work. Indeed, just last week Luminance raised £32m for its AI platform for lawyers.
Pierre Proner, chief executive of Lawhive, said: “The consumer legal market is totally broken and hasn’t really had an update in hundreds of years. It came out of personal experiences of really battling an airline while trying to get money back during Covid, and feeling totally cut out of the legal system. We went to some high street firms to see if they could help and it was far more expensive than was justified to pay.”
Posted by: Marc Hardwick at 08:10
Tags: funding lawtech legaltech
Back in December the government outlined plans for a new 'Incubator for AI' team (i.AI), with an aim to initially recruit 30 people across technical AI experts, programme managers, product managers and engagement specialists, all working together to rapidly enhance the adoption of AI through a center of excellence (See Government begins building AI Incubator Team).
Since then, the incubator has been working on a number of projects including; a Redbox Copilot which is seeking to leverage AI to search through thousands of documents, interrogate them and summarise them into tailored briefings; Caddy, an AI powered Copilot for customer service built in collaboration with Citizens advice; and a Consultation Analyser, an AI-powered tool to automate the process of analysing public responses to government consultations.
One of its latest projects is rAPId, a data sharing solution for government bodies. The solution has been developed by the No.10 data science team for the creation of APIs to enable automated approach to data sharing rather than the use of spreadsheets and emails. A working version has now been released as open source on GitHub, and is already being actively used by several government departments including the Cabinet Office and HM Treasury. rAPId is comprised of several components that together form a replicable template for simple data storage infrastructure in AWS with a RESTful API and user-friendly UI. It allows the simple ingestion and sharing of standardised datasets.
In addition, the AI incubator team is also now working on Project Condor, an effort to develop an open-source cloud infrastructure that will enable departments to create their own infrastructures of data, analytics and AI.
The number of AI and data-driven projects already implemented, or in development, across the UK Public sector are numerous. Those developed by the AI Incubator are but a small part of AI activity across the civil service and government departments, but give a great insight into the pace of innovation, and the scale of the impact we can expect to see as such projects are scaled.
Posted by: Simon Baxter at 09:52
Ireland HQ’d technology company Engage XR has had a challenging year, as interest and demand has waned for VR and metaverse technologies, causing the business to pivot back to a focus on the Education sector and enterprise training.
Engage XR saw total revenue for 2023 fall c.5% to €3.7m, though the business has continued to take market share in North America, with 60% of total ENGAGE revenue being generated in the region up from 35% last year. The business posted an EBITDA loss of €4m, with €7.9m in cash reserves following a successful fundraise of €10.5m in February 2023. The last year saw a number of enterprise customers deciding not to renew contracts or renewing at lower levels, revenue for remote events and collaboration also decreased, as many tech companies mandated employees to return to the office. ENGAGE Enterprise revenue, incorporating events and collaboration, fell by almost 34%.
The business is now pivoting to focus on more sustainable long-term opportunities where it is gaining traction, namely education and enterprise training. In the last nine months, Engage XR signed four of the largest contracts within the Company's history, including the signature of its first seven-figure deal in early 2024 with a large Middle East based company, all for education or training use cases. The business also recently announced its School of AI initiative which is a new product offering for schools and universities to be released in Q2.
2024 has started strongly according to this morning’s trading update, with Q1 the company’s biggest ever revenue quarter. Engage XR is also seeking to strengthen relationships with partners including Meta and Lenovo, and establish more recurring revenue, shifting away from single pay entertainment purchases. Metaverse and VR technologies still have a long runway ahead of them, but in the short term it would seem opportunities are going to be in niche areas only. Even with potential catalysts like Apple’s Vision Pro, it is hard to see the field gaining much traction whilst the current AI fervour exists.
Posted by: Simon Baxter at 09:40
Kyndryl has renewed a five-year deal with EY to manage the firm’s SAP environment.
Kyndryl – and before the spin-off and creation of the new brand, IBM – has been working with EY for around a decade running and managing EY's SAP workloads. Kyndryl is also providing modernisation and security services for the mission-critical systems that support EY’s auditing and consulting operations.
Kyndryl Consult (the firm’s technology consulting capability) will work to analyse EY’s SAP processes and optimise outcomes. Kyndryl consultants will use a combination of the Kyndryl Bridge platform (which generates data-driven insights) and Kyndryl Vital for co-creation and problem solving. The SAP environment is a mix of both on-prem and cloud, and Kyndryl will put a focus on improving security using Zero Trust principles and introducing new cyber technology.
In February when Kyndryl announced its Q3 results, CFO, David Wyshner, said the firm was continuing to sign “contracts with attractive margins”, under its Accounts initiative. Revenue was down 10% to $3.9bn as the firm becomes more selective about engagements, but it is demonstrating progress in terms of achieving the important renewals, such as EY, and improving the mix of more margin-rich contracts.
Posted by: Kate Hanaghan at 08:50
Tags: contract cloud cyber data
Friday saw TCS publish its FY 2023-24 results with the Group growing revenue globally by 3.4% in constant currency, held back in part by a flat performance in its key US market. Revenue at TCS is rapidly approaching the $30bn mark with the firm achieving Group revenues of $29.1bn for FY24 (FY23 $27.9bn) which saw Group operating profit and associated margin improve to $7.16bn and 24.6% respectively (FY23 $6.7bn & 24.1%).
Whilst the business continues to grow despite some tough headwinds, it is being held back by flat and declining performances in some key markets. Geography wise the US remains a challenging market, accounting for 51% of TCS Group revenue (FY23 53.4%) the US business declined by -0.2%. There was also little growth in FY24 achieved in Continental Europe where the business expanded by just 0.7%. The UK however continues to ‘fly’ Increasing revenue by 10.1% in FY24. Indeed, the UK performance has become central to the wider Group’s growth with many of the company's ‘mega deals’ ($1bn+ contract value) based here (click here and scroll down). The UK now accounts for 16.5% of all Group revenue up from 15% a year ago, and moves forward with increasing confidence (see TCS opens its London Pace Port).
The performance by vertical was also mixed, on the plus side Energy, Resources and Utilities (+12.6%) and Regional Markets & Others (+19.8%) both grew double digit, whilst Consumer Business (+1.8%), Life Sciences & Healthcare (+4.8%) and Manufacturing (+7.3%) also expanded. However, largest sector BFSI (-1%) and the smaller verticals Technology & Services (-2.3%) and Communication & Media (-2.6%) all declined.
TCS attrition is running at 12.5% with head count at the end of Q4 2024 at 601,500, down from 615,318 at the end of Q1.
Posted by: Marc Hardwick at 07:51
Tags: results offshore IT+services
Growth Capital Partners (GCP) is a UK-based Private Equity (PE) firm, specialising in providing investment to high-growth and founder-led technology and service businesses across the UK and Ireland.
The firm was founded in 2009, after a partner-led buy-out from Close Brothers. Since then, the firm has launched three further funds and, in the last decade, has pivoted towards investing in professional services, technology product, and technology services businesses, as it seeks to capitalise on growth opportunities in these areas.
An important differentiating factor is that GCP principally offers partnership investment, working alongside founders to support growth, typically taking a significant minority or small majority stake in each business. GCP's ideal investment candidate has a track record of revenue growth and is cash-generative and profitable, with an EBITDA typically in the region of £2-8 million. It has a track record of supporting businesses to an exit, with EBITDA into double digits. Importantly, GCP sees its role as partnering with ambitious founders and outstanding management teams, supporting them not just with capital but also with business and growth expertise, tailored to their needs and long-term goals.
It has a portfolio of sixteen companies largely across technology and professional services and has achieved exits on a further seventeen investments, the most recent example of which was the sale of risk management software provider CubeLogic in February.
We spoke to Alex Thomson, a Partner at GCP, to understand more about the areas of technology which are of interest to the firm and how the firm would articulate its offering to prospective investee companies.
Research subscribers and UKHotViews Premium readers can access the article here. If you are not yet a subscriber, or are unsure if your organisation has a corporate subscription, please contact Deb Seth to find out more.
Posted by: Tania Wilson at 13:24
Tags: M&A startups acquisitions
London-based Integrum ESG has announced a partnership with, and £100k investment from, Industrial Thought (a group of companies specialising in investment in taxation, financial data, and related consultancy services).
Founded in 2018, Integrum ESG provides a specialist Environmental Social Governance (ESG) data and ratings platform. It combines human analysis with AI models to capture, verify, and present relevant granular ESG data (including ESG scores and sentiment – including real-time “controversy alerts”) for assessment, either through a proprietary dashboard or integrated into other systems via GraphQL APIs.
The company describes its approach as “glass box” (as opposed to “black box”), focusing on transparency so that investors can drill down into assessments and weightings to show the provenance of the data and veracity of the ESG claims made across their portfolios (see The Legal Landscape for ESG for more details of the measure in place to guard against greenwashing in ESG reporting).
Integrum ESG intends to use the funds to further develop new data-driven solutions. Industrial Thought, through its group company Financial Software Ltd, will make Integrum ESG’s services available to its clients in the wealth management industry. Industrial Thought has also placed an option for follow-on investment.
Posted by: Craig Wentworth at 09:10
Tags: funding partnership wealth management
In this piece of research by Kate Hanaghan, Chief Research Officer, profiles SMB (small and medium sized businesses) buyers to understand the scope of their tech investments to accelerate digital progression, and the potential impact on productivity growth.
SMB Productivity: Driving value through modernisation explains that productivity growth is a challenge for firms of all sizes – and has been for some time. Implementing the right technologies in the right way can help, but SMBs face their own set of very specific challenges. They don’t always have dedicated IT expertise, meaning they can be late to adopt – and benefit from – technological advancements. Additionally, it’s difficult for smaller organisations to engage directly with large technology vendors, and a direct partnership between the two is often just too impractical (given the large number of SMBs in the market, their typically small budgets, and the go-to-market model of the large vendors).
This is where the channel (the ecosystem that enables the supply of products and services from large vendors via distributors and resellers to buyers) becomes an essential piece of the jigsaw. Through Value Added Resellers (VARs) and Managed Service Providers (MSPs), the UK’s SMB community is not only gaining access to new technology (for example cloud-based services and smart workplaces), but it is finding ways to improve productivity levels.
A big THANK YOU to the organisations that gave up their time to take part in this research:
The tech providers in this report are all SMBs themselves (Excenta, Croft Communications, inTEC, Digital Origin, KSM Telecom), and when SMBs work with SMBs, the whole local economy benefits. Furthermore, if local firms – such as those in legal and construction – can sufficiently digitise, this in turn improves the range and quality of services they are able to provide, which in turn also benefits the local community.
Read the report: SMB Productivity: Driving value through modernisation.
Contact Deb Seth if you would like to join TechMarketView or find out if your organisation already has access to our research and services.
Tags: research VAR SMB
Data centre capacity and network connection speed remain critical to AI adoption with the market operating under severe local constraints. CO2 emission restrictions and the cost of land have made it harder to construct and operate data centres in urban areas, encouraging operators to seek out cheaper locations. This results in geographically dispersed data centres that can cause delays in communication, usually decreasing the quality of network performance.
To help try and address this, NTT DATA has announced a successful demonstration of an All-Photonics Network (APN) driven by “hyper low-latency connections” between its data centres in the UK. NTT DATA connected its data centres in Hemel Hempstead and Dagenham, East London via NTT’s Optical Wireless Network (IOWN) APN, and communication between them operated with a round-trip delay of less than 1 millisecond - typical delays between data centres at an equivalent distances can exceed 2 milliseconds. The aim being to join up geographically distributed IT infrastructure into a functioning equivalent of a single data centre, regardless of where they are physically located.
Not only does this demonstration (which was also repeated across some of NTT DATA’s US centres) showcase the benefits of consolidating Japanese-headquartered technology corporation NTT and IT services and consulting player, NTT DATA, (see NTT and NTT DATA merge operations outside Japan), it also supports a growing number of potential use cases such as distributed, real-time AI analysis, industrial IoT and predictive maintenance, smart surveillance systems, smart grid and energy management and natural disaster detection. NTT DATA is also conducting demonstrations in the financial sector, where low latency is required for remittances, settlements, and transactions.
Posted by: Marc Hardwick at 08:31
Tags: communications datacentre
The Government has unveiled further plans to crack down on retail crime, setting out measures to make it easier for police and businesses to deploy new technology to catch perpetrators and prevent new offences.
The Home Office paper, entitled "Fighting Retail Crime - More Action", builds on the police-led Retail Crime Action Plan, focusing on five key areas: 1) Introducing a standalone offence for assaults on retail workers; 2) Expanding the use of electronic monitoring for prolific shoplifters; 3) Greater use of facial recognition; 4) Designing out crime; and 5) Easier reporting of crime to catch more offenders.
Technology plays a significant role in several of these areas, including plans to consider GPS monitored curfews and exclusion zones; making it harder to sell stolen goods online; a commitment to Pegasus, the private-public partnership where retailers are providing data to Opal, the national police intelligence unit; encouraging the use of Digital Evidence Management Systems (DEMS); and piloting technology to make it easier for small retailers to report crimes, such as providing photos and videos directly from mobile phones.
Many of the initiatives included in the paper have been announced previously. The plan to encourage the use of facial recognition expands on numerous announcements from the policing minister Chris Phelp over the last year (see Policing Minister calls for more investment in innovative technology); however, it does reveals that £17.6m will be invested in enhancing facial recognition capabilities, including up to £4m to support the procurement of purpose-built live facial recognition mobile units. This funding is part of the £230m the Government committed as part of the Spring Budget 2024 (see Spring Budget 2024: TechMarketView takes a view) to deliver pilot schemes that have the potential to improve productivity in policing. The Home Office is also encouraging police forces to maximise the use of retrospective facial recognition technology to identify prolific shoplifters and it wants to ensure retailers are using facial recognition (including live facial recognition systems that utilise shared watchlists) to its fullest potential.
As we discussed in our Police Suppliers, Trends, and Forecasts and UK Public Sector Predictions 2024 reports the deployment of facial recognition technology remains controversial. Although there is reasonable public support for the use of the technology by policing, expanding its deployment by retailers is likely to raise a far higher level of concern and will need to be monitored closely.
Posted by: Dale Peters at 10:11
Tags: police policy retail government law+enforcement public+safety facial+recognition
Ahead of the publication of its full year results on 11 June, iomart has said it expects to report revenue growth of 10% to c.£127m. Recurring revenue has slipped very slightly from 92% to 91%. Adjusted EBITDA is expected to grow 4% to c.£37.5m.
Lucy Dimes, who became CEO in September 2023, pointed out that the firm’s “increasing strength of our offering” is being reflected in order growth. The company says it is seeing “good growth in order bookings” in managed services. Here, existing customers and prospects have “responded positively” to a broader solution set and what the company describes as a “re-invigorated focus on customer service”.
The firm has also been building out its Microsoft capabilities. In June of last year, iomart acquired Microsoft Azure Cloud solutions provider, Extrinsica, for an initial £4m in cash. This marked a “demonstrable” increase in Microsoft capabilities and year-on-year revenue for the acquired business increased. However, the delay of some “larger orders” from the existing base means none of the earn-out consideration will be payable. Accesspoint Technologies, acquired six months later in December, is currently performing in line with expectations.
Posted by: Kate Hanaghan at 09:45
Tags: cloud managedservices tradingupdate
UK-headquartered cybersecurity supplier Darktrace has released a trading update for its Q3 2024 (ended 31 March 2024).
Revenue for the quarter was up 26.5% year-over-year to $176.1m, more in the ballpark of the 28% growth seen in Q3 2023 (see Growth slowdown continues at Darktrace) than the hypergrowth of 50% which the company experienced during the same period in FY22.
Darktrace expects Adjusted EBITDA margin for Q3 to be north of 21% (above its previously communicated guidance range) and reported Annualised Recurring Revenue (ARR) of $731.1m at 31 March 2024 (representing yoy growth of 23.5% at constant currency). The company added 170 customers during Q3 (bringing the total to 9,402 at 31 March 2024, 999 of which being net new over the preceding 12 months).
Though revenue growth slowed in H1 2024 (see Darktrace growth slows in H1 FY24), after the company introduced significant changes to its teams and Go-to-Market approach in Q1, Darktrace nevertheless describes its performance in FY24 to date as “first half stablisation and second half re-acceleration” – citing the introduction of Darktrace ActiveAI Security Platform in early April 2024, for instance, as a better framework for its AI offering going forward.
As a result of Q3’s numbers, Darktrace has raised its expectations (again) for FY24 revenue growth and Adjusted EBITDA margin to at least 25.5% (0.5 percentage points above the previous high end of the range) and 23% (previously 21%) respectively.
Posted by: Craig Wentworth at 09:28
National Highways has chosen Version 1 as its strategic long-term partner to support the delivery of its digital transformation. The contract is worth £47.5m over its five-year term and includes an option to extend for a further two years.
National Highways, a wholly government-owned company, is responsible for managing and improving England’s strategic road network. Version 1 has worked with National Highways over the last six years, providing cross-cloud adoption, implementation, and support services, including operating as the organisation’s Application Development and Maintenance (ADM) partner.
Under the new contract, Version 1 will provide a managed service across National Highways infrastructure and platforms. It will support the organisation’s sustainable transformation journey and help deliver its aim of designing roads that meet the highest levels of safety and reduce the number of fatal or serious injuries.
National Highways was looking for a partner that could offer a modern and agile DevSecOps approach and provide the skills to deliver its strategy to meet both current and future organisational needs. Through the new partnership, Version 1 will be able to build on the progress it has already made in transforming and transitioning National Highways’ legacy infrastructure to the cloud.
Version 1 will be delighted to have secured its long-term position at National Highways. The contract award is testament to the success of its previous work and demonstrates the strength of the relationship between the organisations. The deal follows the Strategic Delivery Partner contract Version 1 secured with Companies House last year (see Version 1 lands strategic partnership with Companies House) and highlights the impressive progress it is making in the UK public sector.
Posted by: Dale Peters at 09:13
Tags: contract cloud transport government DevSecOps public+sector managed+services
Pactio, a three-year-old London-based private equity management software start-up has raised £11m in Series A, as it looks to further develop and grow its platform for private capital investors. The funding round was led by EQT Ventures and included participation from Stripe Europe's former CEO Matt Henderson and Volt founder Tom Greenwood.
Pactio is taking advantage of the fact that business processes and technology in private markets are very much of a legacy and manual nature, often many years out of date, adding complexity to an increasingly important yet complex asset class. Closing transactions can involve navigating manual, error-prone workflows across legacy applications (think lots of excel files and word documents to juggle) and teams of investors, tax advisers, lawyers, and fund administrators all with their own systems. All adding complexity, cost and risk to time sensitive deals.
Pactio’s offering sits up front, away from middle and back-office operations and looks to digitise transactions from the ‘go’, improving data capture and ultimately helping de-risk workflows at source. The firm is currently targeting professional advisers, including law firms, as well as private equity (PE) and will use the proceeds of the funding round to grow its team, particularly around PE expertise and Machine Learning skills. Private markets are an underserved but increasingly important component of the FS technology space with plenty of room for improvement and opportunity for digitisation of business processes.
Posted by: Marc Hardwick at 09:06
Tags: funding FinTech private+equity
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