In the year to 31st December 2014, Servelec, provider of software, hardware and services to the health & social care, oil & gas, power & nuclear, water, utilities and broadcast sectors, increased revenues by 23.2% to £51.8m. Underlying operating profit growth was 8.4% to £12.2m, while pre-tax profits were down 2.9% to £10.6m. In the UK – the company’s biggest revenue contributor – revenues increased from £36.7m to £40.8m.
Servelec is a business of two ‘halves’. The bigger of the ‘halves’ is Servelec Automation (Controls & Technologies). In the year to 31st December 2014, this part of the business grew revenues by 29% to £35.1m, due to a strong performance from Servelec Technologies. Servelec Technologies reported a 70% increase in revenue, which included a full year’s contribution from Semaphore (acquired in October 2013). However, the order intake was not as strong as hoped due to delays in a number of large control systems orders and a dip in activity in the UK water sector in advance of the next water investment period (April 2015). Moreover, the other part of Servelec Automation – Controls – saw revenues decline by 2% due to challenging market conditions in oil & gas.
While the outlook in ‘Automation’ is good due to strong market demand drivers, the more positive story overall seems to be coming from the smaller part of the business: Servelec Health & Social Care (the Social Care label was added following the acquisition of CoreLogic– see Servelec sees CoreLogic of social care move). The division reported total revenue growth of 11.9%, and organic revenue growth of 10% to £16.3m. During the period it benefited from the go-live of RiO for West London Mental Health Trust, the first full exit from the National Programme for IT (NPfIT). It also achieved a very high success rate in the London NPfIT Refresh, with 17 preferred bidder wins out of a total of 29. Now, the addition of CoreLogic adds the social care string to Servelec’s bow in this space. As well as adding to the order bank (by £15.4m) resulting in a divisional order bank of £49.1m, the addition of CoreLogic gives Servelec the opportunity to develop an integrated health & social care offering. If Servelec gets it right, it will be well placed to meet the increasing urgency to provide patients and service users with a converged approach to health & social care service delivery.