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Friday 02 December 2022

Marc Benioff becomes sole CEO of Salesforce

sfSalesforce announced third quarter results that saw revenue increase 19% at constant currency (cc) to $7.84bn. Growth in Europe was faster at 23%.

The firm’s Platform and Other category, which includes Slack, was up 18.5% to $1.5bn. Salesforce also said it delivered a “record operating margin” with the non-GAAP operating margin coming in at 22.7%.

Co-CEO Bret Taylor said the firm is “closing more transformational deals and multi-cloud expansions”. However, it was also announced that Taylor is to step down as Vice Chair and Co-CEO of Salesforce from January 31, 2023. Marc Benioff – who described Taylor as “an incredible technologist, leader and friend” – will then become Chair and sole CEO of the company. Salesforce shares tumbled 6% in extended trading indicating that Wall Street was perhaps more focused on the news of Taylor’s departure than the Q3 performance.

In Q2, Salesforce – which is regarded as a bellwether for the SaaS sector – said it had seen “customers becoming more measured in the way they buy”. In the Q3 announcement, Benioff, said: “There’s never been a more important time for our customers to connect with their customers in a whole new way.” We concur that being close to customers, understanding their every need, and delivering an exceptional experience will be more important than ever as we head into 2023.

Posted by: Kate Hanaghan at 09:45

Tags: results  

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Friday 02 December 2022

Secureworks transition to XDR well underway

SecureworksThe story for Secureworks in Q3 FY23 was much the same as it was in Q2 - See Secureworks continues to exit low margin business. The business continues to decline overall as it transitions away from lower margin services and focuses on Taegis, its Extended detection and response (XDR) platform.

Overall revenue for Q3 was $111m, down -17% yoy. However, Taegis subscription revenue grew 100% to $47.9m whilst Taegis ARR grew more than 80% to a record $222m in Q3. The business doubled its Taegis customer base over the past 12 months and Taegis now represents 65% of overall subscription ARR. Overall net loss was $28.1 million, or $0.33 per share.

The benefit of the focus on Taegis is clear to see, with average revenue per Taegis customer around $139k, a premium to non-Taegis revenue which averages $77k. Secureworks continues to try and differentiate Taegis through innovation with R&D up to 29% of revenue in Q3. The company also continues to invest in expanding its partner base, and in sales and marketing, as it looks to further promote and strengthen its position in an increasingly competitive market for XDR solutions.

And just as I highlighted yesterday in the coverage of CrowdStrike – See CrowdStrike warns of macro headwinds impacting growth, the focus on supplier consolidation is also an area Secureworks highlighted as an opportunity for its Taegis platform. Management also iterated a similar message around customer buying behaviour, with more scrutiny of deals at the back end of the sales cycle as opposed to budget cuts, driven by the uncertainty organisations are facing under the current macroeconomic climate. For Q4 FY23 the company expects revenue of $108 to $112m and net loss per share of $0.41 to $0.46.

To end with I wanted to highlight a comment from Secureworks President and CEO, Wendy Thomas, during the Q&A, which I think sums up the current market climate pretty well.

“I really don't have a crystal ball. And frankly, a lot of these prospects don't either”

Posted by: Simon Baxter at 09:34

Tags: cybersecurity   XDR  

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Friday 02 December 2022

Kingfisher aims to soar to digital with Google

googKingfisher, the international home improvement company that includes the B&Q brand, has signed a five-year strategic partnership with Google Cloud to support a broad range of “digital ambitions”.

Kingsfisher has 1,500 international stores and 80,000 full-time staff. It will be working with Google on a range of solutions from infrastructure to analytics. Its ambition is to improve customer experience, achieve better demand forecasting, and improve platform reliability. For customers, the benefits will include a more reliable and improved online and e-commerce experience. For example, it will be replatforming the Screwfix site to make it one-hundred times faster. Meanwhile, B&Q will be able to scale up from 300,000 products online to more than four million in the coming years.

In addition to B&Q and Screwfix, the Kingfisher stable of firms includes Castorama, Brico Dépôt, and Koçtaş. The Group is one of the largest SAP enterprise users in Europe and is already in the process of migrating its on-premise legacy workloads to Google Cloud. This is enabling it to get better – and faster – access to data. Notably, Kingfisher will continue to pursue a multicloud strategy (Read Infrastructure Operations Supplier Rankings).

Posted by: Kate Hanaghan at 09:30

Tags: cloud   data   partnership  

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Friday 02 December 2022

‘ear, ‘ear – DIY heading aids coming to the UK?

logoEarlier this week I asked the question, ‘why can I pick up a decent pair of wireless earbuds for under a hundred quid yet one hearing aid can cost upwards of a grand?’ along with the wish that I could adjust my own (NHS) hearing aids at home (see Angels give a funding shout to aid Hearing Diagnostics’ test platform).

Many thanks to roving tech company chairman James Appleby (and founder/CEO of SAP consultancy Bluefin Solutions back in the day), who alerted me to Pretoria, South Africa-headquartered hearX Group whose product line includes ‘self-serve’ hearing aid brand Lexie.

Lexie was recently launched in the US and can be purchased online or over the counter at Walgreens stores. For $799 you get a pair of Bluetooth hearing aids which look remarkably similar to the NHS ones I wear (but mine don’t have Bluetooth). You download an app to set up and adjust them and then chat with the Lexie support team online for final tuning.

hearX plans to launch Lexie in the UK ‘soon’ with an indicative price of £839. The US launch follows the approval of the US FDA for retail sale of certain hearing aids suitable for perceived mild to moderate hearing impairment.

While DIY hearing aids will not be suitable for all, Lexie looks like a potential market disruptor in countries where low-cost/zero-cost government-funded programmes are not available for the masses.

As for me, ‘free’ still sways it and for which reason I say again, God bless the NHS!

Posted by: Anthony Miller at 09:24

Tags: healthtech  

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Friday 02 December 2022

Temenos and Mbanq focus on BaaS opportunity

TemenosCore banking technology provider, Temenos has announced an important new step in its partnership with Banking as a Service (BaaS) specialist Mbanq. The deal will see the Swiss vendor take a minority stake in the innovative US fintech. The collaboration strengthens the ties between the two companies and is in addition to an existing initiative around credit unions.

The latest collaboration will see Temenos and Mbanq offer a joint BaaS proposition that will initially target mid-tier banks in the US. The offering will enable clients to spin up new banking operations in just a few months via a pay-as-you-go model that includes regulatory support. In this way, Temenos and Mbanq will aim to help clients to compete more effectively in a marketplace increasingly populated by innovative new entrants.

BaaS has seen explosive growth of late and is part of the growing trend for embedded finance, a market estimated to have produced revenues in excess of $20bn during 2021 in the US alone. These approaches enable users to rapidly embrace modern technology and to establish efficient back-office processes. This facilitates the launch new financial services propositions without the traditional heavy lifting or major up-front investment.

The banking ecosystem is continuing to evolve and, as the disaggregation of banking services continues, the future landscape will not necessarily be dominated by the major institutions that traditionally held sway. In its recent quarterly earnings call, Temenos highlighted that it was experiencing strong demand from smaller and mid-tier banks, despite the impact of the broad-based economic slowdown (see: Temenos revises forecasts).

Posted by: Jon C Davies at 09:17

Tags: banking  

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Friday 02 December 2022

UiPath Q3 benefits from more disciplined growth

UiPathQ3 results in overnight from Robotic Process Automation (RPA) software provider UiPath, show revenue for the quarter grew 19% YoY to $262.7m despite some significant currency headwinds. The big plus was decreasing losses where improvements in operational efficiencies including a restructuring, hiring freeze and tighter discretionary spend, saw operating losses decline to $67m for the quarter (Q3 2021 $116m).

A lot has happened at UiPath over the last year or so as it tries to deliver on its potential. This saw a new Co-CEO Rob Enslin join in April (see New Co-CEO at UiPath) to sit alongside founder Daniel Dines with a view to helping grow the business more efficiently. The numbers certainly suggest that progress is being made addressing losses that had been expanding faster than sales. It looks like new leadership is adding a more disciplined approach to driving growth that are improving operating margin and making a step in the right direction.

Posted by: Marc Hardwick at 09:15

Tags: results   RPA  

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Friday 02 December 2022

TCS to develop and run UK’s Rail Data Marketplace

TCSTCS continues to make good progress in UK transport (see TCS lands 10-year TfL Taxi admin deal) winning a new contract with the Rail Delivery Group (RDG) to develop and operate a newly created Rail Data Marketplace (RDM). The contract is scheduled to run for at least six years. 

Rail data has been as fragmented as the wider network and the RDG is looking to knit it together into a single digital service as it looks to improve passenger experience. The RDG (previously known as the Association of Train Operating Companies or ATOC), is the British rail industry membership body that brings together passenger and freight rail companies alongside Network Rail and High Speed 2. The RDM was first announced by the rail minister back in 2021 as an attempt to improve collaboration between the rail industry and the Government and drive an uplift in both innovation and passenger experience. Ultimately, this should see better data sharing across different organisations improving transparency and consistency of data and ideally drive innovation within an ecosystem of rail data users.

This is a good data-led win for TCS which will deploy ‘TCS Dexam’ - a controlled data exchange environment for organisations and their partner network – alongside Google’s Apigee platform to develop and securely manage the APIs that partner applications will use to connect with the RDM.

Simon Moorhead, CIO & Member of the Board, Rail Delivery Group, commented: “In winning a challenging competitive tender TCS was able to demonstrate its capability to support the innovative launch of the Rail Data Marketplace. This brand-new service will build on the capability created in TCS's Dexam product supported by Google's integration tools. It will offer access to new data sources as well as present existing data in more accessible formats to help businesses use rail open data to speed change, reduce costs and create new value for customers.”

Posted by: Marc Hardwick at 08:26

Tags: contract   rail  

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Thursday 01 December 2022

Unisys launches new visual identity

Unisys logoUnisys has launched a new brand strategy, logo and visual identity after undertaking a major rebranding exercise. The new brand is the culmination of its transformation strategy and will be backed by the company’s biggest marketing campaign in more than a decade.

The company’s previous branding had been in place since the 1986 merger of American IT corporations Sperry and Burroughs that resulted in the creation of Unisys. The roots of the company go back a long way, with the Sperry Gyroscope Company being founded to manufacture navigation equipment in 1910 and Burroughs starting life as the American Arithmometer Company in 1886.

In 2020, Unisys sold its US Federal business to SAIC in an effort to pay down debt and reduce its pension obligations (see Unisys to sell US Federal Business to SAIC for $1.2bn). The sale allowed the company to invest in its Stealth, InteliServe, CloudForte and ClearPath Forward products; and accelerate the integration of AI and IoT capabilities into new solutions.

At the beginning of 2021, Unisys transitioned to a new structure comprising four business units: Digital Workplace Solutions (DWS), Cloud, Applications & Infrastructure Solutions (CA&I), Enterprise Computing Solutions (ECS), and Business Process Solutions. The restructure was part of the strategy to shift the focus of the business to higher-growth and higher-margin markets and solutions. During the year it also acquired Unify Square—Unisys’ first acquisition in 17 years—and went on to buy Mobinergy and CompuGain.

Unisys is now a very different business than the one formed in 1986, but it has suffered from a perception of being an outdated, legacy business. The rebrand was long overdue and combined with the new strategy and cultural shift within the organisation should help reinforce the message Unisys is a business that is relevant to the needs of both the private and public sector. It still has its challenges to face (see Unisys reduces guidance again), but this is definitely a step in the right direction.

Posted by: Dale Peters at 15:02

Tags: software   rebrand   IT+services  

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Thursday 01 December 2022

*NEW RESEARCH* NHS Shared Business Services: Responding to sector challenges

Report Cover, Blue with female doctor in scrubsNHS Shared Business Services (NHS SBS) has grown and evolved significantly since its inception more than 15 years ago. Its capabilities have been expanded to cover all essential corporate services and it has grown its client base such that it now services 47% of the country’s NHS organisations, touching almost every part of the health service at a national, regional, and local level. In addition, it has continued to develop new solutions and has worked to introduce emerging technologies to modernise its approach. 

Importantly, during the pandemic, NHS SBS proved its resilience and agility as it continued to deliver critical services uninterrupted, responding to exceptional peaks in demand during challenging circumstances. As it looks to the future and to the delivery of next-generation business process services, it must do so against a backdrop of change and uncertainty – specifically, increased demand, complex patient needs, and budget constraints. NHS reform is accelerating with the creation of Integrated Care Systems and the need for an integrated view across health and social care is greater than ever.

In this research, following an in-depth interview with NHS SBS Managing Director, Erika Bannerman, TechMarketView looks at how NHS SBS is responding to a fast-changing NHS landscape by reimagining shared services for the digital age – developing new platforms and services that make life easier for NHS employees, patients, and suppliers.

TechMarketView PublicSectorViews subscribers can download the research now - NHS Shared Business Services: Responding to sector challenges. If you are not a subscriber to the PublicSectorViews research stream, or want to find out if your organisation has a corporate subscription, please contact Deb Seth who will be happy to help you to gain access to this and much more besides.

Posted by: Georgina O'Toole at 11:15

Tags: nhs   strategy   jointventure   health   market+trends   public+sector   marketanalysis  

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Thursday 01 December 2022

The Access Group acquires COINS in construction ERP

Access Group logoFast-growing business management software specialist The Access Group has acquired again, completing the acquisition of UK-headquartered Construction Industry Solutions (COINS) for an undisclosed sum.

This is just the latest purchase for Access, which grew 43% on a proforma basis in FY22 reaching £685m in revenue supported by a continuing high level of acquisitions plus organic growth (see Tuesday’s UKHotViewsExtra: Doubling Access Group doubles again). 

COINS logoCOINS, is a global construction management software and services company providing end-to-end business solutions to the contracting, home building and service management sectors.

Founded in 1986, the Slough-based business was put up for sale in 2021. According to Companies House filings, it had revenues of c£45m in the year to end of March 2021 with 40% of sales outside the UK. Recurring revenues were high – 78% of the UK business in FY21 – and it was cash-rich. It is no surprise to see Access, which completed an incredible 20 acquisitions in FY22, decide to add the business to its ERP division. 

We’ve seen growing interest in the construction sector amongst software and tech suppliers recently, and COINS is well-positioned in the sector with a large installed base in the UK and over 100k users worldwide. The acquisition is designed to fuel Access’ global ERP growth as well as extending its ability to provide software and services to organisations operating in the construction sector.

Access uses its divisional structure to prevent the business being overwhelmed by its many acquisitions, with each division generally only having to manage two or three a year. The ERP division is now busy integrating COINS, which we sense is likely to be more challenging than some other purchases given its size, complexity and geographical spread. But Brendan Flattery, managing director Access ERP, sees huge opportunity with COINS joining the business and we can expect to hear more details of their joint plans for the future over the coming months.

Posted by: Tola Sargeant at 09:42

Tags: acquisition   software   M&A   construction  

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Thursday 01 December 2022

Okta grows 37% and expects profitability throughout FY24

OktaCybersecuirty provider Okta have reported Q3 FY23 revenue grew 37% yoy to $481m, whilst subscription revenue grew 38% yoy to $466m. Net loss was $209m, compared to a loss of $221m in Q322. International revenue grew 39% and represents 22% of total revenue. Compared to Q3 FY22 revenue growth of 61% there has been a noticeable slowdown in the past year. Investors however seemed to view the positive outlook for profitability well and shares rose 15% in the afterhours. However, considering they are down 76% ytd it will be little consolation for shareholders.

Much like CrowdStike - See CrowdStrike warns of macro headwinds impacting growth, management also highlighted challenges around the macro environment, which they believe will worsen before it gets better, but conversely to CrowdStrike they didn’t highlight any meaningful changes to sales cycles.

Okta added 650 new customers in Q3, bringing the total customer base to over 17,000.  It also added 215 customers with $100k-plus ACV. Notable examples of customer wins in Q3, included KeyBanc, a Fortune 500 FS company who sought a cloud-based identity solution to help modernise their legacy systems, eliminate redundancies across toolsets and support cloud-first initiatives.

Another was a Fortune 100 global entertainment conglomerate. As a result of many acquisitions, the company had disparate identity providers that resulted in its employees having multiple different log-ins to access corporate apps resulting in friction, unpleasant user experiences, and slowed business outcomes. They are now deploying Okta Workforce Identity Cloud to cover its 200k employees.

For Q4 FY23, the company expects total revenue of $488-$490m, representing a growth rate of 27% to 28% yoy. For the full FY2023, it expects total revenue of $1.836 to $1.838bn, representing a growth rate of 41% yoy. Management also reported an adjusted profit in Q4 and, in a surprise, predicted profitability for all of next fiscal year. Okta also highlighted it is significantly reducing hiring plans, rationalising its facilities footprint, and applying greater overall financial discipline.

Posted by: Simon Baxter at 09:37

Tags: cybersecurity  

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Thursday 01 December 2022

Disappointing H1 for Triad

Triad logoTriad Group has had a disappointing first half to its financial year with a drop in revenue and a lower gross profit margin resulting in a loss for the period.

The Group achieved revenue of £7.11m for the six months ended 30 September 2022, down 17% year-on-year (H1 2021: £8.58m). Gross profit as a percentage of revenue fell to 19.3% (H1 2021: 26.8%), gross profit was down 40% at £1.38m (H1 2021: £2.30m) and loss before tax came in at £0.41m (H1 2021: profit £0.67m). Cash reserves were £4.37m (H1 2021: 5.34m).

Executive Chairman, John Rigg said the poor results were “entirely due to external factors beyond our control” including the pandemic, the war in Ukraine and turmoil in the UK government. He said these factors had resulted in “extraordinary delays in awarding new contracts and processing the associated paperwork”.

Analysis of Digital Future framework data for the period shows increased spend from Department for Business, Energy and Industrial Strategy (BEIS) and Department for Transport (DfT), but a significant drop in income from Triad’s key public sector customer Ministry of Justice (MoJ).

TechMarketView has often commented that Triad has been too reliant on its work with MoJ, so it is good to see the company win work with other public sector organisations. The company has recently secured a contract with BEIS to provide specialist resources to supplement the department’s existing Microsoft skills and it also secured a place on National Highways’ £1bn IT Commercial framework.

The Group has been shifting away from transactional IT recruitment to higher-margin consultancy. In today’s announcement, Rigg said, the Group’s “heavy reliance on operating on high volume, low margin principles are now over”. It is continuing to recruit new consultants and make operational improvements, which have resulted in an increase in billable consultancy days. Management reports a strong upturn in levels of new business wins and bidding activity during the start of H2. 

Posted by: Dale Peters at 09:33

Tags: results   H1   consultancy   public+sector  

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Thursday 01 December 2022

Cybersecurity startup Smarttech247 to IPO on AIM – it’s complicated

It’s been some time since I last wrote about ‘The Mysterious House of Pires’ (aka UK-based AIM-listed ‘next-gen’ technology investment business, Pires Investments) – the most recent being back in June when it appeared that they were to be acquired by even more mysterious AIM-listed tech investor Tern (see Pires takes a Tern (actually, it’s the other way round). Well, that didn’t happen after all.

logoI tell you this because one of Pires’ portfolio companies, Cork-based cybersecurity Managed Detection & Response platform developer, Smarttech247, is to launch on AIM mid-December. The IPO, at 29.66p per share, will value Smarttech at £36.8m and will raise £3.67m gross (£2.8m net). Smarttech has the majority of its staff in Krakow and Bucharest.

On the face of it Smarttech makes money! Pre-tax profits for the year to 31 July 2021 were €1.3m on revenues of €7.2m, which were 50% up on the prior year. The business is ‘on track’ for further growth this FY (to 31 July 2022) – but they give no numbers. Why not, I wonder? It’s December already! Also, The Group (I will explain in a mo’) was burning cash at a fierce rate – some €2m operating cash and €1.6m in investments (including M&A) and borrowed €2.3m to top up the coffers.

Now, about this ‘Group’ thing.  It’s a bit complicated.

Firstly, it appears that Smarttech’s revenues are attributed to a wholly owned subsidiary, Zephone, which itself has a 100% owned subsidiary, Smarttech247 Cyber Security Sarl incorporated and registered in Romania (“The Group”). Further, Smarttech founder and Executive Chairman Ronan Murphy is also co-founder of data security and GRC start-up Getvisibility, another in the Pires portfolio, which raised dosh in March this year (see Visibility slightly obscured as Getvisibility raises more dosh). GetVisibility is both a customer of Smarttech and a supplier as well as being sub-tenant. Smarttech is also a shareholder of GetVisibility.

I lost the will to live at page 24 of the 135-page Prospectus so I will leave it up to you if you want to dig further. All I can say – and this is not investment advice – is that I prefer to see things less complicated and more transparent.

Posted by: Anthony Miller at 09:29

Tags: startup   ipo   cybersecurity  

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Thursday 01 December 2022

*UKHotViewsExtra* CrowdStrike warns of macro headwinds impacting growth

CrowdStrikeInvestors were spooked yesterday as CrowdStrike shares fell ~15% on news that the company sees macro headwinds impacting growth.

For Q3 FY23, CrowdStrike reported total revenue of $580.9m, a 53% increase yoy. Subscription revenue grew 53% yoy, whilst professional services revenue was $33.5m, representing 46% yoy growth. Net loss was $55m ($50.5m in Q3 FY22), but with plenty of cash in the bank this is not a concern. The company continues to invest heavily in R&D, sales and marketing, looking to strengthen and consolidate its position in the market. In terms of geographic performance, the U.S. grew 46% and international revenue grew 72% yoy.

However, despite posting still very strong growth it was commentary around increased macroeconomic headwinds that caught investors attentions with Q3 net new ARR below expectations. Management said it is seeing organisations starting to respond to macroeconomic conditions by adding extra layers of required approvals and extending the time to close deals.

Despite a limited UK presence, as one of the largest providers of security software CrowdStrike are a good bell weather for cybersecurity spending, especially for cloud and platform-based security solutions.

HV PremiumTechMarketView subscribers, including UKHotViews Premium subscribers, can read more about the company’s performance and what the impact of these macro headwinds may mean for UK enterprise customers in our UKHotViewsExtra article - CrowdStrike warns of macro headwinds impacting growth

Subscribers to TechMarketView's TechSectorViews research stream who want to gain greater insight into the UK Cybersecurity supplier landscape can read our latest report UK Enterprise Cybersecurity Supplier Rankings 2022.

If you are not yet a subscriber, or are unsure if your company has a corporate subscription, please contact Deb Seth to find out how you can gain access to our research and much more.

Posted by: Simon Baxter at 09:26

Tags: cybersecurity   economy  

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Thursday 01 December 2022

Capita completes sale of Pay360 to Access Group

Pay360Capita has formally completed the sale of its Pay360 payments business in a deal that is worth around £156m. Pay360 is an FCA-regulated business that provides gateway and acquiring services, as well as a variety of solutions across the payments value chain. UK-based Pay360 has been acquired by AccessPaySuite (part of the Access Group).

UK-based Pay360 currently supports around 2,500 customers across the public and private sectors. The company has recently expanded into payment facilitation with the launch of its Evolve platform. In 2021, the business processed around 140m transactions worth in total just under £9bn, generating revenue of £46m and a pre-tax profit of £7.1m.

Capita first announced the sale of Pay360 in August 2022 following its wide-ranging strategic review (see: Gap narrows in H1). The move is part of an ongoing programme of rationalisation as Capita looks to streamline its portfolio and concentrate on its core business services proposition.

Pay360 is the third financial services business sold by Capita during 2022, following the disposal of two speciality insurance services providers. The move also reflects an ongoing retreat from that area of operations over recent years. Capita will use the sale proceeds to pay down debt and strengthen its balance sheet as it looks to build a more sustainable business for the long term.

Posted by: Jon C Davies at 09:02

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Thursday 01 December 2022

Cazoo ex-CFO cashes out

logoI completely missed the announcement in Cazoo’s H1 results back in August (see Cazoo: Burn, burn, burn) that CFO Stephen Morana was jumping ship, to be replaced by former Graphcore CFO, Paul Woolf.

I only noticed my omission on seeing yesterday’s SEC filing that Morana is cashing in his chips, so to speak, offering for sale the vast majority of shares (some 4.7m of 4.9m) granted to him in an options plan. If he sells at Cazoo’s current share price of about. 30 cents he’ll end up with around $1.4m. Once upon a time Cazoo’s shares were worth almost $10.

Well, every little bit helps.

Posted by: Anthony Miller at 08:30

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Wednesday 30 November 2022

*UKHotViewsExtra* TPXimpact H1: Challenged internally and externally

TPCimact logoTPXimpact has released its first set of financial results since the co-founders, Neal Ghandi and Oliver Rigby, stepped down from their executive positions of CEO and CFO respectively. Both are now in non-executive director roles. In their places, from 1st October, are Bjorn Conway as CEO and Steve Winters as CFO (see All change at the top for TPXimpact).

As would be expected, they have set about undertaking a detailed operational review of the business. Readers of TechMarketView might remember from previous analysis (see TPXimpact turns a few corners and work back) that the ‘buy and build’ digital transformation services company has been undertaking a complex integration at the same time as pursuing ambitious growth plans.

UKHotViewsPremium logoToday’s H1 results, for the period to 30th September 2022, show the challenges that the period has brought. Read more.

TechMarketView subscribers can read our additional analysis in UKHotViewsExtra - TPXimpact H1: Challenged internally and externally | TechMarketView. If you are not yet a subscriber, or are unsure if your company has a corporate subscription, please contact Deb Seth who will investigate your options.

Posted by: Georgina O'Toole at 10:13

Tags: results   reorganisation   digital   integration   digitaltransformation  

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Wednesday 30 November 2022

Pioneering Regulators get £12m to encourage Innovation

BEIS logoInnovation is one of three priority areas for the UK government – see Autumn Statement: With Challenge comes Change & Opportunity – but in order for the UK to become an ‘innovation nation’, regulation needs to keep up with the fast pace of emerging technologies.

To this end, as set out in the Chancellor’s Autumn Statement earlier this month, Government Chief Scientific Adviser Sir Patrick Vallance will lead work to consider how the UK can better regulate emerging technologies, enabling their rapid and safe introduction.

In parallel, we were pleased to see Science Minister George Freeman today award £12m in grants from the Regulators’ Pioneer Fund for 24 projects led by regulators and local authorities. These pilot projects are designed to help to remove regulatory barriers to innovation, supporting businesses across key UK sectors – from net-zero to healthcare – to bring their products and services to market more quickly.

Many of the winning projects include a SITS element, for example:

  • The Medicines and Healthcare Products Regulatory Agency gets £750k for a project seeking to create an artificially generated control group for use in clinical trials. If successful, it could lower the cost of clinical trials and improve how new treatments are tested before they are applied to the NHS.
  • The Environment Agency will use £272k to fund digital twin modelling to create a digital representation of a real-world place and system, so they can simulate the operation of multiple low carbon technologies in an industrial cluster.
  • The Solicitors Regulation Authority will be backed by £120k to explore alternative methods of technology-enabled Dispute Resolution which could reduce the backlog of court cases, compounded by the COVID-19 pandemic.

Whilst the individual grants are not huge, it is encouraging to see the government prioritising innovation and recognising that regulation needs to evolve more quickly with the UK setting appropriate regulatory standards, which are key to investor and customer confidence. Of course, regulation is only one part of the ‘innovation nation’ puzzle, skills being another vital piece (see also Skills & Retention: Why it’s essential to keep investing in your staff).

Posted by: Tola Sargeant at 09:36

Tags: funding   regulation   innovation   public+sector  

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Wednesday 30 November 2022

HPE finishes FY22 on a high

hpeFY22 financial data from Hewlett Packard Enterprise (HPE) showed the firm bringing the year to a close on a high. Revenue was +5% (constant currency) to $28.5bn.

FY22 revenue increased across the portfolio in the both the Growth businesses (Intelligent Edge +14%; HPC & AI +2%) and in its Core areas (Compute +6% and Storage +1%). Compute, which was a meaty 46% of revenue in Q4, achieved a “near record” quarter in both revenue and operating profit terms. Quarterly revenue was up 22% in the final three months of the financial year. Meanwhile, “strategic pricing actions” and richer configurations helped margins increase 530bps over last year taking the margin to 14.7%.

An important metric for HPE is the performance of the as-a-service (AAS) segment. Pivoting to AAS is of key strategic importance to HPE and AAS order growth was +68% in FY22. Through FY21 and FY22, there has been a steady improvement in the mix of business delivered as a service, with an increasing proportion of more profitable software and services. In Q4, 66% of the Annualised Run Rate came from software/services, up from 62% in the comparable period in FY21 and 59% at the beginning of FY21. HPE has reiterated its target to achieve a Compound Annual Growth Rate (CAGR) of 35-45% in ARR between FY22 and FY25.

EMEA, which accounts for 36% of revenue, saw revenue growth in the year of +4%. In the UK, HPE got a new Managing Director with Matt Harris taking on the top job.

For the new financial year – FY23 – HPE is forecasting growth of 2-4% (cc) – i.e., a little off the pace of FY22.

Posted by: Kate Hanaghan at 09:15

Tags: results   data  

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Wednesday 30 November 2022

Workday Q3 performance receives positive response

Workday logoWorkday shares lifted c.7% in extended trading following the release of “solid” Q323 results and the announcement of a $500m share buyback program that “is a direct reflection of our belief that our shares are undervalued, and a demonstration of our confidence in the business and the long-term opportunity ahead."

Revenue increased a very creditable 20.5% to $1.6bn for the period ending 31 October 2022, including a 23.3% increase in subscription revenue to $1.43bn although the company also posted an operating loss of $26.3m vs. operating income of $23.9m in the year ago period. The net loss was $74m vs. a $43m year ago net profit. 

The company remains cautiously confident in the current uncertain environment so raised the low end of its fiscal 2023 subscription revenue guidance to $5.555bn-$5.557bn, 22% growth. A somewhat higher degree of caution was evident in fiscal 2024 outlook - subscription revenue in the $6.5bn-$6.6bn range, indicating 17%-19% yoy growth. This reflects continued momentum balanced by the lengthening sales cycles the company is seeing, particularly around net new opportunities. 

The company will be looking to its emerging industry accelerator investments - the first ones target banking, healthcare, insurance, and technology - and industry accelerator partners including Accenture, Deloitte, KPMG and PwC, to add to performance across the coming year.

Posted by: Angela Eager at 09:07

Tags: results   cloud   software  

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