Chess outmanoeuvres recession with 50% growth

BUSINESS telecoms specialist Chess has seen its profits jump by more than 50% to £3.55m on the back of acquisitions and organic growth.

The acquisitive, privately-owned Alderley Edge-based company has increased its turnover to £29.11m from £25.69m after implementing “a robust strategy for managing slow and late paying customers”.

The business – which is led by award-winning entrepreneur David Pollock – had pre-tax profits of £2.42 in 2009 and had previously anticipated that its turnover for the 12 months to the end of April 2010 would be £27m.

The company report and financial statements reveal that Chess has performed better than it expected despite having to write off £154,989 on an aborted acquisition while also sustaining costs of £66,000 relating to a fraud perpetuated by a bogus customer.

Over the past year, the company has acquired 12 ‘customer bases’ from other resellers for a total cost of £4,742,406 (2009: £4,216,304).

The report also reveals that since the start of May, Chess has bought three more customer bases ‘for a projected total cost £2,258,000’.

Chief executive David Pollock hailed the results as “very pleasing”.

He said: “In what has been a difficult year for the UK economy, Chess has once again delivered a strong trading performance.

“Our proven business model of acquisition, organic growth and cross sales to existing customers continues to deliver growth in turnover and profit.

“Our robust strategy for managing slow and late paying customers has ensured we maintain bad debt provision in line with the previous year which is very pleasing and testament to the hard work of our people.

“The business continues to integrate successfully customer bases with a further 12 acquisitions during the year ended April 30, 2010.

“Excellence in customer service remains at the heart of everything we do allowing us to maximise the relationships with our customers.

“Over the year our sales teams have had notable success with additional product sales and in encouraging customers to enter longer term contracts by product.”

Chess has also renegotiated its bank facilities over the past year to support its ‘ongoing’ acquisition activity.

Its existing facilities with RBS were consolidated into a loan of £4m, an overdraft of £10m was maintained and a further acquisition facility of £5m was also arranged.