FY10 decline for NextiraOne as public sector sales shrivel

Integrator suffers double-digit top- and bottom-line slump as public sector business shrinks more than 70 per cent

NextiraOne UK suffered a double-digit drop in revenue and profit in 2010 as cuts in public sector spending hit the comms integrator hard.

Sales for the 12 months to 31 December fell 13.5 per cent year on year to £35.95m, while pre-tax profit was almost cut in half, standing at £1.39m. Services chipped in 61 per cent of the VAR's 2010 sales, roughly flat on last year's figure.

In 2009, public sector revenue accounted for 40 per cent of NextiraOne's total UK sales. But last year this figure had sunk to just 13 per cent. This equates to a decline in revenue from almost £17m to less than £5m.

The directors' report for the year indicates that "such a decrease was not unexpected, other than how quickly the shrinkage occurred". But the loss of such a large chunk of turnover was "partially offset in the second half by significant new customer wins in the commercial sector," claims the integrator.

The report adds: "The improving order intake at the end of 2010 means that the company is well placed to take advantage of its lean cost base and competitive edge in an exciting market."

NextiraOne's staff attrition rate grew from 8.4 to 4.8 per cent over the course of the year. Overall UK employee numbers fell from 230 to 215.

One of the integrator's goals in the UK this year is to improve its book-to-bill ratio of orders to sales. In 2010 the ratio was 0.98:1, more or less flat on the 2009 figure. This year the VAR wants to push the figure up to 1.05:1, as revenue backlog builds up over 2011.

"However," adds the report, "given the profile of customer contracts, of which several may be for multiple years, the timing of renewal dates may distort this ratio."