eg solutions well placed for growth
FINANCIAL services software supplier eg solutions has said it is well placed for a return to growth after posting a full year increase in revenue of 13% to £4.2m.
The Staffordshire group also saw a pre-tax profit rise of £0.1m, compared to a year-on-year loss of £0.8m, while net cash rose to £0.4m by year-end.
In the face of the challenging trading environment it has also successfully reduced costs by £0.4m – or 9% – compared with the previous year.
Operational highlights included new contract wins with Nationwide Building Society, Legal & General, one of the largest Nordic bancassurance groups and the healthcare division of one of South Africa’s leading financial services groups.
Looking ahead, its recent £0.23m acquisition of Bristol-based XTAQ promises new growth opportunities.
“With renewed confidence and a more stable economic backdrop, eg is well placed to return to growth,” said chief executive Elizabeth Gooch.
Rodney Baker-Bates, non-executive chairman, added the spate of new orders with existing customers had demonstrated the group’s ability to sell more deeply and widely into its customer base.
He said the group had started the year with a solid order book which promised much for the year ahead.
“The acquisition of XTAQ should be earnings enhancing in the current year, based on contracted recurring revenues and expected immediate product sales. XTAQ has a significant sales pipeline; if satisfactory progress can be achieved in converting these prospects into firm orders, the potential for the enlarged group is good,” he said.
eg said the past year had seen the group get back onto an ‘even keel’ after the difficulties the recession posed to its key customers.
“Our focus has remained resolutely on our core business of developing and delivering back office optimisation software and associated services which deliver substantial and measurable cost savings for our customers,” said Mrs Gooch.
She said that although contract negotiations remained lengthy, the financial services sector was now more willing to invest in projects for which there is a tangible and positive return.
“We have demonstrated clearly our ability to develop long-term relationships capable of providing ongoing revenue from support services, additional licences and implementation services – in effect, selling more deeply and widely into our existing customer base – as well as procuring new customers,” said Mrs Gooch.
She said much of the success was down to a solid business model based on an initial sale to prove the concept followed by additional roll-out sales. She said this had been achieved with a number of existing customers in the UK and internationally.
She said the acquisition of XTAQ increased the company’s customer list from 25 to nearly 40 with companies such as Barclaycard, Citibank, GE Capital, Principality Building Society and Royal Bank of Scotland as well as a number of public sector clients.
