Chess dials up 77% rise in profits

BUSINESS telecoms company Chess, led by IoD Cheshire Director of the Year David Pollock, increased its profits by 77% last year and has spent around £850,000 on three acquisitions since its year end.

The Alderley Edge firm increased pre-tax profit to £2.3m for the year to the end of April 2009, from £1.3m a year earlier.

Turnover increased 22% to £25.7m. The company also said that revenues from line rental and data products increased 48% to £9.8m.

During the year it added around 10,000 customers, through a combination of acquisition and organic growth. It acquired seven customer bases from other resellers for a total cost of £4.2m.

Chief executive David Pollock said: “A significant proportion of our growth continues to be through the acquisition of customer bases.”

The company paid £867,000 for three businesses acquired since its financial year end in April, the most recent being Bradford-based XTel Communications, which it acquired in October. The company said the acquisition will add about £500,000 in revenue to its 2010 turnover.

Mr Pollock added: “Organic sales have shown good growth as UK businesses strive to reduce costs in this tough economic climate. Despite the media hype regarding recession we have found negligible increase in customer bad debt.

“However, there has been an upturn in the number of acquisition targets coming to market. Organic cross sales of our value broadband to existing customers has been very encouraging. As such the prospects for significant growth in EBITDA in the coming year are very good.”

Employee costs were up around £600,000 to £3.3m, as staff numbers grew by 12 to 114.

Chess has a bank facility of £5.5m of which £3.5m had been drawn down by the year end. It had used around £840,000 of its £1m overdraft facility.

Since the year end, monthly turnover in August 2009 increased 18% to £2.32 (August 2008: £1.96m).