Customers move into the cloud but IT firm keeps feet on the ground

SHEFFIELD-BASED IT firm Electronic Data Processing (EDP) overcame a bumpy first-half to post full-year profits of £401,000.
Turnover dropped slightly, by £320,000 to £5.51m in the year to September 30, and margins fell but the company is optimistic that it is well placed to face the challenges withing its sector next year.
EDP’s chief executive Julian Wassell said: “We have a strong product and services offering, a robust business model and considerable financial strength which will enable us to meet the challenges we will face in the forthcoming year.  Having strengthened our sales team we expect to be well positioned to take advantage of those new business opportunities which do arise.”
The company has strong cash balances of £5m, after paid dividends of £631,000 to its shareholders. It remains committed to pay an interim dividend of 2p per share and a final dividend of 3p per share in future years.
EDP supplies its software products under long-term contracts either in the form of traditional on-site licencing arrangements or cloud-based, hosted service level agreements. These long-term agreements provide the company “with good visibility of revenues” from its existing customers for up to five years. Contracted recurring revenues during the period under review represented 80% of its total revenues.
“Our business model is strong. We continue to manage our cost base prudently and monitor working capital carefully,” said Mr Wassell.
He added: “It is pleasing to note that the proportion of our revenues delivered through our hosting centre has exceeded 50% for the first time. This reflects our strategy to grow the hosting/cloud computing side of the business.”

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