SITS execs gunning for growth, claims research

Private equity survey shows bosses of software and services firms are feeling bullish about the year ahead

Despite the looming threat of a double-dip recession, new research claims many software and services firms are feeling confident about their growth prospects for the year ahead.

Private equity firm ECI Partners quizzed 246 UK chief executives from firms with a turnover of between £10m and £200m. Out of these, 46 worked for software and IT services (SITS) companies.

According to its findings, 79 per cent of respondents expect to see turnover growth of more than six per cent this year.

However, among the IT-focused chief executives questioned, 84 per cent are forecasting at least a six per cent rise in turnover over the next 12 months.

Furthermore, 78 per cent said they plan to recruit more staff this year, with 58 per cent expecting staff numbers to grow by more than six per cent.

Curiously, given the high level of M&A activity that has taken place in the channel over the past 12 months, 93 per cent of SITS chief executives said they plan to focus on organic growth this year.

The only blot on the economic landscape for all of the survey's respondents seems to be access to finance, with 63 per cent expecting to face difficulties in raising funds this year.

Steve Tudge, managing director of ECI Partners, said: "The survey results are dramatic, [as] growing SMEs are positive about the outlook for further growth in profits and employment in the coming year.

"Despite the barriers to growth, which are principally cited as a weaker macro environment and funding constraints, we continue to be optimistic about the prospects for good mid-market companies," he added.

Tom Wrenn, head of ECI's SITS team, added: "The positive outlook of CEOs of SITS companies matches our own experience of the sector.

"The SITS sector is helping to lead the UK out of recession and we are actively looking to help CEOs in the sector maximise the potential of their growth companies."