MXC profits bloom but CEO flags market 'uncertainty'

MXC's EBITDA was £1.2m up from a loss of £100,000 in the same period last year

Channel investment vehicle MXC Capital has seen its profits grow but its CEO Marc Young has said "uncertainty" is heightened in today's market.

For the six months to 29 February, MXC's EBITDA was £1.2m, up from a loss of £100,000 in the same period last year.

Speaking to CRN, Young said this growth in profitability was driven by the success of such MXC portfolio firms as Redcentric.

"The net assets in value are a lot greater [than last year] and a number of businesses have performed very well," he said. "Redcentric and Castleton have performed very well. We are becoming a more mature platform now."

Over the last six months, MXC made investments in Castleton, Sagacity, Pinnacle Technology, Castle Street Investments and ECV. Young said with these latest investments, MXC has a "good spread" of the market, but the investment vehicle is not going to sit back now.

"We continue to focus on a broad set of services as well as IP," he said. "We try to have a decent spread of opportunities but we are looking to continue to grow both the number of companies we work with and also the areas we focus in. Sagacity gives us a nice positioning in big data and analytics, and there are other key areas around that space."

Young indicated that software and services would be the areas that MXC will look to make further investments into, although he wouldn't give a specific target that the firm has.

"I think the landscape is changing as thing like robotics automation become more mainstream and become more enshrined in working patterns," he added. "We are happy to work in the leading edge but we are not in the bleeding edge."

Over the last year, MXC has taken on board Andy Ross and Gavin Lyons, two appointments which "strengthen us quite considerably", Young said.

Despite the growth of MXC's bottom line, Young said there are worries for the tech sector at the moment.

"I think there is more uncertainty in the market than there has been before," he said. "But we are making sure our position outperforms the sector rather than just aping the market segment. Good businesses will continue to do well."

However Young felt that the IT industry has become more resilient to wider economic downturns.

"A lot of people talk about whether we are in a tech boom," he said. "[I feel] there has been a fundamental change in the way technology is employed in business today than it was in 2000. We believe that technology will increase for businesses for the foreseeable future. So in many ways we should see the sector as more resilient but within the oscillations. Certainly our view is that technology is enabling people to take costs out of businesses.

"We are seeing an increase in the number of UK tech businesses being successful," he added. "And that's a trend we want see continue and a trend we want to support."