Phoenix in profit as it prepares to be picked by Daisy

Infrastructure services outfit returns to the black ahead of its £135m takeover

Phoenix IT Group has returned to the black and succeeded in cutting debt ahead of its planned acquisition by comms provider Daisy Group.

The London-listed firm said the first phase of its three-year turnaround plan under chief executive Steve Vaughan is now complete as it unveiled preliminary results for the year ending 31 March 2015.

While turnover fell nine per cent to £212.4m, a pre-tax loss of £29.2m last year was reversed to a "strong" £8.8m profit this time around and net debt fell by £7.1m to £49m.

Phoenix was not in great shape when Vaughan took over last March and the premium Daisy is paying for Phoenix "recognises the progress made in the first phase of the strategy, and the potential of future phases", he said.

"It has taken no small amount of energy, but the first phase of our three-year plan for Phoenix is complete," Vaughan (pictured) explained.

"Over the past 12 months a significant amount of work has been done to stabilise our financial performance, revitalise our go-to-market approach and bring greater rigour to the way in which we work, serve and partner with our customers. Those efforts are just the first part of our plan for the group, but it is gratifying to see them translate into our results.

"It is also encouraging to start to see some customers, some new, some long-held, respond well to the improvements we are making to our service portfolio."

By division, Phoenix's business continuity arm saw revenues fall one per cent to £49.9m, with managed services sales falling four per cent to £65.4m and partner services revenue tumbling 15 per cent to £96.2m.

Vaughan said a combined Daisy/Phoenix outfit would be "well placed to exploit the converging IT and telecoms requirements of mid-market customers". Set to close in late July, the deal values Phoenix at £135m.