After selling off part of its Itheon business, reseller Xploite has announced it is expecting 2008 profits to come in well ahead of expectations.
Xploite bought Itheon just over a year ago for £7m and has now sold the legacy monitoring software solutions arm of the business to Bluechip Customer Engineering Limited for a cash sum of £3.3m. Xploite is expecting to realise a £1m profit on disposal of the business which will be used to pay down the company's borrowings.
Xploite chief executive Ian Smith said: "Our strategy is to identify, acquire, consolidate and develop businesses in the IT services sector. This is exactly what we have done with Itheon.
"After the purchase we invested in developing the key IP and are already seeing good returns from Storage Fusion; secured material cost savings by switching customers; and are now selling for a notable profit, the parts of business which are not core to our growth and development."
Xploite also issued a year end trading update today indicating that pre-tax profits before amortisation for the year to 31 October would be significantly ahead of market expectations. The VAR announced it has recently tied up two lucrative Storage Resource Analysis licensing agreements with Computer Data Source and GlassHouse Technologies.
Xploite claimed its subsidiary Anix had performed strongly throughout the year. It also revealed it had profited from "tight working capital management" and the successful integration of the businesses it has acquired. Xploite's net debt is now down to £1.25m from £7.39m six months ago and preliminary results for 2008 are expected in January.
Smith added: "We finished the year very strongly and are now seeing real benefits from the active management of the businesses we acquired both in terms of organic growth, improving margins and operational execution. At this very early stage in the year, we are encouraged by our pipeline and are continuing to improve our forward visibility; however, we remain mindful of the current economic environment."
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