Vertex cuts losses from £30.7m to £2.3m
OUTSOURCING specialist Vertex has slashed its losses from £30.7m to £2.3m over the past year following a spate of acquisitions and sales.
The Liverpool-based business – one of the largest firms in the UK specialising in customer management outsourcing – has seen its turnover increase to £365.9m in the 12 months to March 31, 2010, from £354.8m last time.
But the directors’ report and consolidated financial statements also show that its operating profit before interest, tax, amortisation and exceptional items fell to £14.7m from £21.2m.
It attributes this fall in operating profit to the disposal of its 1st Software and The Exchange businesses.
Vertex, a former United Utilities division which handles websites, call centres and back office operations for local authorities, utilities and retailers, employs 6,664 staff – of whom around 2,500 operate from its North West offices in Manchester, Warrington, Bolton and Liverpool.
It is owned by US-based private equity firms led by Oak Hill Capital Partners as well as GenNx360 and Knox Lawrence International.
On March 31, it sold three American companies – First Revenue Assurance LLC, IEI Financial Services LLC and Utility Portfolio Solutions LLC – for just $1 and posted a $12m loss on the disposal.
Last August, it also sold 1st Software Group and Exchange FS to VTX Holdings netting the company £27.52m.
It bought Vertex US Holdings II Inc and Vertex Canada Holdings II for £20.8m in October 2009 – and these businesses have contributed £40.6m to its revenue and a £100,000 loss before tax over the past financial year.
On March 3, 2010, the company bought Australian companies Call Active and Peripheral Computer Industries Pty for £4.8m.
The directors’ report states: “The group has made substantial progress in its planned transformation to a focused customer management outsourcing business.
“During the year, acquisitions have been made in North America and Australia to strengthen the group’s presence and focus while businesses that did not fit the core strategy have been disposed of.
“The group recorded strong performances within North America where the successful integration of the ADUS business and new business wins improved profitability, and within the public sector as a result of higher volumes and cost improvements.
“The continued impact of the global credit issues during the year saw a further retrenchment in mortgage customer activity which the group has partially offset by cost efficiency.
“The US and UK debt businesses experienced declines in volumes and a loss of key customers which resulted in increasing losses and the decision to sell the US business and close the UK business in March 2010.”
Commenting on progress in the current financial year, the accounts also state: “In May 2010, further to the group’s strategy to focus on customer management outsourcing the US business and assets of the Multifamily business were sold to NWP.
“This business was not considered core to the group’s operations and was not integrated with the North American business.”
Speaking to TheBusinessDesk.com, a Vertex spokesman said: “Within the UK we are number one for customer management outsourcing (CMO).
“We owe this and our high levels of client satisfaction and business retention to the quality and commitment of everyone in Vertex.
“We work hard to sustain this flawless delivery and our focus has enabled successes in business development and a number of significant, new name, clients wins.
“We see ongoing opportunity in investing in our core CMO capabilities – supported by our IT applications and associated capabilities – and will continue to invest in this.
“We continue to expand our global presence and capabilities and our recent acquisition in Australia of PCI demonstrates our commitment to this.”
