GCI Telecom throws NetServices £3.2m lifeline

NetServices listed on AIM early this year, one of the indices at the London Stock Exchange

Troubled managed services outfit NetServices – comprising NetServices plc and WAN Services Ltd – is teetering on the edge of a sale to GCI Telecom for £3.2 million in cash.

Pending shareholder approval at a meeting on 18 May, the deal with GCI – also trading as Edge Telecom – would represent a disposal of almost all NetServices’ assets. The new combined entity would trade as Accumuli.

Graham Norfolk, chairman at NetServices, said in a statement to the LSE this morning that the sale is “the best way forward”.

“Despite a significant restructuring and a refocused strategy, revenues were difficult to predict and were taking time to come through. Therefore we believe the assets of the business will perform better within the larger GCI group,” he said.

Accumuli is expected to live up to its name, with directors proposing a policy of buyouts of other ICT and services providers to drive profits.

“This is an area where Ian Smith, one of our directors, has significant experience, and we believe it has attractive near-term opportunities for shareholders,” said Norfolk.

NetServices posted an unaudited interim loss after tax of £0.2m on revenue of £2.3m in the half-year ending 28 February, accelerating the losses of £0.1m on sales of £5.9m seen in its previous full financial year ending 31 August 2009.

It was rumoured on the ADVFN message boards as early as July 2009 to be going bust, and by early February this year CRN had reported that the Cisco Managed Services Premier Partner was speaking to at least one potential buyer.

The company had only listed on the Alternative Investment Market (AIM) in March, following a cash injection from Smith.