Infoserve struggles in challenging market

A TOUGH market has hindered online search marketing company Infoserve Group.

The Leeds-based business, which has a portfolio of online marketing tools for SMEs to help businesses get found online, said it has seen “challenging trading conditions” in its annual report for the year ended March 31 2013.

The business reported an operating profit of £187,000 (2012: £483,000) and said it should be noted that “trading conditions remain challenging”.

Revenue was £4.5m, 8% down on 2012. The group said that an element of this reduction was due continuous changes by Google to its algorithms. The group said income from Google has been reduced by £65,000 from the previous year.

Infoserve, who’s major investor is Pace Micro founder David Hood, said the market for online directories is expected to remain tough but the business has sought to diversify its product range and its activities during the year.

In January to March this year, 48% of the group’s revenue was from non-directory income compared to 25% the same period last year.

The group said it continues to reduce overheads and therefore, despite the reduction in sales, the business has been able to make an operating profit of £280,000 before exceptional items (2012: £589,000).

Infoserve said: “Good progress has been made in changing the sales mix and pay per click sales between January and March reached 25% of the total revenue generated, a significant milestone as the group seeks to move more of its product offering towards guaranteed response.”

The company, which has its headquarters at South Side Aviation at Leeds Bradford International Airport, said there may be requirement for the group to raise further funds to in the future in order to fully exploit opportunities available.

It also reported that following it’s strategic decision to consolidate the business, there has been a restriction in operational capacity.

Infoserve said: “This will undoubtedly impact on the business’s ability to respond quickly to opportunities in a rapidly evolving market. Such changes may place a significant strain on the group’s management, as well as operational, financial and personnel resources.”

Earlier this year, Infoserve appointed its founder Derek Oliver as chief executive.