Phoenix rises in first quarter
Services group's interim management statement reveals healthy pipeline
On fire: Phoenix has started the year in fine form, agreeing a five-year extension to a major business continuity contract
Services specialist Phoenix IT Group is cautiously optimistic after a first fiscal quarter that saw annual contract worth and order book value remain steady.
The London-listed firm issued an interim management statement yesterday revealing annual contract value (ACV) as of 30 June stood at £203.2m. This is more or less flat on the £203.7m ACV as of 31 March, and well up on the £177m posted in June 2009.
Order book worth reduced marginally from April to July, falling from £353m to £349.3m. But this figure is still 30 per cent up on the £268.5m order book value as of 30 June 2009.
Phoenix has also announced a five-year extension to its biggest business continuity contract. Having been due to expire at the end of March next year, the deal will now run until 2016. The annual £3.44m worth of the project will add over £17m to the company's order book.
Earlier in the year Phoenix revealed it had landed three major outsourcing contracts. The company yesterday announced it has swallowed the initial costs of deployment and that "the integration of these agreements is now substantially complete". Phoenix is expecting the deals to provide "double-digit margins".
The services firm also claimed Office Shadow Limited, which it acquired on Christmas Eve, has now been fully integrated into its ICM business continuity wing. A new version of Office Shadow's business planning software was also launched in June.
But the news is not uniformly positive, as Phoenix has revealed two outsourcing contracts, worth a combined £12.5m per annum, are to come to an end this autumn. The customers in question are to take services in house, but Phoenix "does not anticipate this will have a material impact on the outcome for the full year to March 2011".
Revenues and operating margins for the three months to the end of June are reportedly in line with the company's expectations. Phoenix also claimed the handover process between outgoing group finance director, Simon Smith, and his replacement, Jonathan Yates, "is well advanced".
"Despite cutbacks in the public sector the overall trend of activity levels remains promising and in line with expectations," said yesterday's statement. "We have had a solid start to the year and we continue to focus on attractive niche markets and organic growth, supported by customer-led capital investment combined with selective acquisitions."