18. Focus Group

Revenue: £214m

Shoreham-based Focus Group has continued its impressive multi-year growth streak, driven by a mix of aggressive M&A activity and sustained organic performance. In 2023, the communications and IT services provider saw turnover leap by 37 per cent year on year — averaging 39 per cent over the past four years — while gross margin expanded 47 per cent in the same period. Pro forma EBITDA (excluding one-off costs and including expected synergies from acquisitions) climbed 43 per cent, while reported EBITDA surged by 67 per cent, reflecting tighter cost management and improved platform efficiency.

Founded in 2003, Focus Group has evolved from a telecoms reseller into a full-stack provider of business technology, with services spanning connectivity, cloud, cyber security, voice and IT. Over 84 per cent of its gross profit is now recurring, highlighting a strong foundation of contracted monthly revenue.

The firm’s acquisitive streak has shown no signs of slowing. In 2023 alone, Focus completed the takeovers of Zest4 Group and its IoT arm, &Partners IT, and Boxx Communications. A further wave of acquisitions followed after year-end, including Cloud Voice and Data, Datasharp UK, Pinnacle, and Infinity Software Consulting. Most recently, in April 2024, the group secured a major backing deal with Hg Capital, a transatlantic private equity firm with a strong track record in software and services. The deal — a mix of cash and debt — is expected to further fuel the company’s buy-and-build strategy across the UK unified comms and IT sector.

Despite its net current liabilities position at the end of the financial year, directors have maintained a going concern basis, supported by strong group-wide liquidity, parental backing from Shoreham TopCo, and a steady pipeline of recurring revenue. They expect the new Hg investment to bolster both operational resilience and future expansion efforts.

Focus Group’s leadership maintains that investment in people, platforms and technology remains central to its future trajectory. Alongside acquisitions, it continues to prioritise systems integration and the realisation of economies of scale to support margin growth and operating leverage.

Strategically, Focus has positioned itself to ride out wider economic shifts. The group’s product set has adapted to market transitions — including the PSTN switch-off and the ongoing decline of fixed-line telephony — with a wider “Digital Workplace” portfolio encompassing hosted telephony, cloud services, cybersecurity and remote working infrastructure. The group claims no customer accounts for more than 1.3 per cent of turnover, further insulating it from account-level volatility.

Having averaged 23 per cent organic growth annually in recent years — on top of a steady drumbeat of acquisitions — Focus Group appears set to remain a dominant consolidator in the UK mid-market tech services space. While integration risk and market saturation are common pitfalls in roll-up strategies, the company’s discipline around synergy capture and recurring revenues offers some protection. All eyes will now be on how the business leverages its new investor partnership with Hg to continue scaling — without compromising service quality or profitability.