NetServices posts loss but says change is coming

NETWORK provider NetServices has posted a loss of £420,000 and reduced turnover but says it’s newly won Cisco partner accreditation will change all of that.

The pre-tax loss for the half year to the end of February compared to a small £3,000 profit a year earlier and is against a 13% fall in revenue to £3.19m from £3.68m.

Finance director Ian Winn said the pre-tax loss was down to £410,000  non-recurring items, including redundancy payments for seven people in January, and pointing instead to the operating profit of £13,000, up on the £5,000 loss made a year earlier.

The company, which still employs 40 people, blamed the fall in revenue on a “reticence” of companies to commit to contracts, which it said would continue to impact on the second half of the year. It also said a contract loss, where a client had taken the service back in-house, and attrition in non-core, non-converged revenues had an impact.

Mr Winn told TheBusinessDesk: “That will impact on sales but we have always been successful at being able to cut costs to revenues. The management team has demonstrated their ability to manage within the company’s means – we’ve been doing that for the last three years.”

Cash balances for the company stood at £810,000, compared with £1.28m a year earlier.

Net Services added that it is in negotiations to reduce a contractual commitment which runs until 2016, the legacy of buying Telefonica UK,  for which it has currently set aside £1.38m.

But the big win, which chief executive Mark Vickers says will really impact revenues, is its Cisco Managed Services Channel Partner accreditation.

It said that this, combined with recent contract wins worth more than £300,000 secured through our partnership with Datapoint, provides “encouragement” for the remainder of the calendar year.

Mr Vickers said: “It’s the zenith, I’m now delivering what I said I would deliver when I came to market.”

The company also announced that non-executive director Graham Norfolk would take over as chairman from Chris Townsend.