Phoenix reshuffle hits FY12 numbers

Services firm enters new fiscal year with caution but claims recent restructure gives it strong platform for growth

Phoenix IT Group has seen its recent reshuffle impact on its fiscal 2012 result but the services heavyweight claims it is now primed for future growth.

For the 12 months to the end of March, the London-listed outfit saw revenue decline 2.6 per cent to £264.7m. Underlying operational profit stood at £32.8m, down more than £3m on last year's figure. This equates to a drop in operating margins from 13.25 to 12.4 per cent.

Phoenix's end user-focused business continuity unit experienced a mixed year in FY12, with sales up 1.5 per cent to £56.3m, but operating profit declining by the same margin to £14.2m. The division's order book value fell by £12m over the course of the year to £101.7m.

The end-user mid-market business saw sales fall 7.3 per cent year on year to £91.1m, while underlying operational income was down 9.4 per cent to £7.5m. The worth of the unit's order book dropped from £73.6m to £69m.

Phoenix's indirect operations suffered a marked decline in profitability, despite revenue staying more or less flat at £117.2m. Operating profit decreased 13.5 per cent to £14.5m, equating to a fall in margins from 14.2 to 12.4 per cent.

Late last year, ChannelWeb revealed that Phoenix was retiring the ICM brand name in its business continuity operations and reorganising the group into five "customer-facing business units" focusing on hosting, business continuity, telecommunications, systems integration and managed services.

Group chief executive David Courtley claimed results for the second half of FY12 had "been very much as expected". He claimed he was "cautious about the group's performance in the first half" of FY13, but predicted that the order book and pipeline would pick up in the second half, resulting in top-line growth across the year as a whole.

"Since I arrived [in July] the team has been reviewing our business lines and the opportunities where we believe we can grow the business, including the high-growth areas of cloud and hosting," said Courtley.

"With the business now restructured into five verticals under a unified brand, we now have a strong platform from which to grow the business by offering a more cohesive range of complementary services to new and existing customers.

"The transition to our new structure from 1 April 2012 has been well organised and controlled. However, it has inevitably led to some disruption with a consequential impact on short-term results."

Phoenix also announced today that Jane Aikman has joined as group finance director and will serve on the company's board. She previously served as finance chief of renewable energy outfit Infinis and has also worked at companies including Pressac and Wilson Bowden.

Aikman replaces Steve Clutton, who is resigning from the company.

Phoenix non-executive chairman Peter Bertram said:"On behalf of the board, I would like to thank Steve for the valuable contribution he has made to our group; most recently in the successful reorganisation of the business. We wish him well for the future.

"I would also like to welcome Jane to the board and look forward to working with her as we begin the next phase of Phoenix's development."