Alternative Networks eyes more M&A as it digests double buy

Comms VAR 'well placed' for further acquisitions following double swoop on ControlCircle and InterceptIT in January

Acquisitive VAR Alternative Networks has reopened the door to making further acquisitions just six months after gobbling up InterceptIT and ControlCircle.

The London-listed firm shelled out a combined £52.3m in cash on InterceptIT and ControlCircle in January to bolster its presence in the managed desktop and complex hosting market.

The integration of the two conquests is "progressing well", Alternative claimed as it unveiled a 14 per cent rise in turnover to £63m for its fiscal first half.

ControlCircle chipped in sales of £4.4m and Intercept £2.1m during the period, which ended on 31 March, but organic growth still stood at two per cent. Net profit fell 17 per cent to £4.59m.

Speaking after the double buy in January, chief executive Edward Spurrier indicated Alternative would take a sabbatical from the M&A game after running the rule over "several hundred" targets in the space of three years.

But in a statement to the stock market, executive chairman James Murray said the VAR remains "well placed to take advantage of other acquisition opportunities", despite its net debt position of £34.7m as of 31 March.

"[We] will continue to assess them on their merits, applying our usual strict criteria of value and strategic fit," he said, adding, however, that the focus will now be on exploiting the integration of the two newly acquired businesses.

"The early indications are that they are already having a considerable impact, with over 150 cross-selling opportunities currently being worked on," Murray said.

The Advanced Solutions division into which InterceptIT and ControlCircle have been integrated is now Alternative's largest. Revenues for the period soared by 43 per cent to £24.5m, with organic growth standing at five per cent.

Alternative also singled out its mobile division for praise after revenue from this part of the business pogoed eight per cent to £22.4m, although fixed-line sales fell eight per cent to £16.1m.

Spurrier said: "Alternative Networks has delivered an encouraging performance in the first half of the year."

The firm, which counts Avaya, Mitel, Juniper, BT and O2 among its key vendors, also revealed it is planning to consolidate its five London offices into one central location.