TSG gets back in the black during robust FY11

Acquisitive VAR owned by Sage founder Graham Wylie posts solid annual numbers

Technology Services Group (TSG), the buy-and-build reseller bankrolled by Sage founder Graham Wylie, enjoyed a stellar FY11 as it boosted sales by more than a fifth and returned to operational profitability.

For the 12 months to the end of March, the Geordie VAR grew revenue by 20.9 per cent to £37.1m. Gross margins for the year slipped almost five points to 38.6 per but operating profit stood at £83,000 despite this, compared with a £467,000 loss in FY10.

Turnover rose by eight per cent organically, with the remainder of the growth coming from the acquisition of Croft Technology in January 2010. During FY11, TSG also acquired chunks of Yeovil-based reseller Gateway Computing, and software VARs Rocket Solutions and Concentrix have been bought since year-end.

The directors' report for the year said: "Over the course of the next year, the group will focus on the significant cross-sell opportunities that exist within the existing 4,000 contracted customers, as well as becoming more aggressive in winning new business.

"Particular focus will be made in the areas of infrastructure support, CRM products, SharePoint and telephony. In addition, having invested in building expertise in cloud computing during [FY11], the group is now able to supply and support solutions based on this technology, where appropriate."

The acquisition of Croft was the basis for the formation of TSG's Enterprise Solutions division, which specialises in providing networking, unified communications and virtualisation technologies to SMBs. Earlier this year, TSG chief technology officer Steve Cox told ChannelWeb that his firm will look to get back on the acquisition trail to add telecoms services to its SMB kitbag.