Phoenix IT Group used the opportunity of its interim results statement to reveal that it will merge its ICM Continuous Business and Servo divisions next spring.
The IT services goliath saw total revenue rise 13.4 per cent year on year to £138.4m in the six months to 30 September.
The figure was bolstered by its recent acquisition of some support contracts from rival KCOM and some big contract wins from its previous fiscal year. Pre-tax profit was unchanged on last year at £13.3m.
Phoenix went on an acquisition roll in the late naughties, picking up Servo in 2006 and ICM in 2007. Servo focuses on mid-market services and ICM on business continuity but Phoenix argued the rise of cloud and virtualisation had blurred the two units' business models.
“With this demand for both availability and technological change, the lines have become blurred between what is a solution for 'normal' operations and what is a solution for disaster scenario,” it explained.
The two units will therefore be merged on 1 April 2011 to form a “single end-user-based organisation” operating out of 17 UK locations, the London-listed firm revealed.
Mid-market services specialist Servo is the larger of the two divisions. It generated profit from operations of £3.5m on first-half revenues up 11 per cent to £49m. ICM saw first-half revenues rise by nine per cent to £28.4m and banked a profit from operations of £6.9m.
Meanwhile, Phoenix’s partner services arm, Phoenix IT Services, saw first-half revenues rise 18 per cent to £61m and banked operating profits of £8.6m.
Although contracts with central government currently represent 24 per cent of the division’s revenue, Phoenix said its focus on outsourcing contracts would gel well with public sector clients' needs to cut costs.
Phoenix chief executive Nick Robinson said: “The fundamentals of our business remain unchanged: recurring revenues, strong cash generation and a focus on niche markets where higher margins and higher rates of growth can be achieved.
“The second half has started well with an increase in sales opportunities across all three divisions and we remain confident that the board's expectations for the full year will be achieved.”
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