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IT services company Phoenix IT Group, which recently acquired VAR Servo, has posted flat results for the six months ended 30 September.
The firm posted turnover of £54.4m, which was a decline of 0.6 per cent compared with the £54.9m posted for the same period last year. Profit before tax stood at £9.2m, compared with £8.9m year on year.
The firm said that turnover from its Phoenix IT Services unit was down by 4.6 per cent to £45.2m. However, NDR, its backup and recovery division, which the company acquired in March 2005, contributed £9.2m.
Nick Robinson, chief executive of Phoenix, said: “Revenue and profit from operations were in line with management expectations and were broadly maintained at the record levels that we achieved last year.
“We are confident that our partners will seek to outsource more of their activities, with opportunities emerging out of the increased competition from offshore players and a desire on the part of our partners to focus on core activities. In addition, our continued expansion into the growing SME market for managed services and outsourcing through NDR and our latest acquisition Servo, presents further opportunities for growth.”
Phoenix completed the acquisition of VAR Servo at the beginning of November and said it intended to increase its service offering through the cross selling of Servo’s services and NDR’s SME customer base.
James Calvert, chief executive of market watcher Regent Associates, said it is not easy in the current climate for a mid-sized outsourcer.
“The drive is very much towards consolidation in this market, hence the need for Phoenix to buy Servo. It is hard for the outsourcers that operate between £40m to £100m in turnover because they are up against the big boys in lots of deals, but they don’t have the advantage of having economies of scale.
“It doesn’t surprise me that Phoenix’s results are flat. The market will continue to be tough for these types of companies for some time to come.”
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