Mobile platform SaaS provider IMImobile updated the market on its first full year since going public on AIM last June (see here). Performance is in line with expectations, and the company appears to be doing well in Europe, where it achieved year on year organic gross profit growth of over 25%.

It said top line revenue and profit growth has been achieved through an increase in recurring and professional services revenues and growth from both new and existing customers.

IMImobile provides a next gen mobile platform called DaVinci used by customers to deliver and manage mobile data services, aimed at driving new sales, reducing time to market and reducing capex. This is a hot space, but fiercely competitive, so IMImobile’s challenge will be to keep innovating and investing to stay ahead. It wants to play a part in industry consolidation, so the £7m netted from its recent listing will come in handy.

Over the next few weeks, the TechMarketView PublicSectorViews team will be looking more closely at the progression of the digital agenda across Whitehall and, related to that, the likely impact of the adoption of Government as a Platform as a model. Alongside the potential impact of a new Government after the General Election (see our latest report: General Election 2015 party pledges: supplier impact), it is the topic that most interests our subscribers. In our view, one of the biggest hurdles the Government will face in further progression of its agenda surrounds ‘data sharing’. The ability to share data between Government organisations, and to open up data to third parties to allow greater innovation, will need focused attention.  And clearly that is why Mike Bracken, the Government’s Executive Director of Digital, has been appointed the first UK Government Chief Data Officer (CDO).

Announcing the appointment, Francis Maude, Minister for the Cabinet Office, stated that Bracken (alongside his current role) will be “responsible for developing new Government Data Standard, championing open data and encouraging the use of data in the decision making process”. He will also push for greater data analysis skills and capability across Government. On Twitter, Bracken states, “ “Job to do as #CDO Support leaders already in govt, set rules of the road for govt and users, develop standards. Should be fun. Onwards!” There’s certainly a big task ahead but the potential prize, if the value in the large swathes of Government data can be unlocked, is large.

Just to remind you about the WCIT Enterprise Awards 2015 organised by our friend John O’Connell. Whereas our own Little British Battlers is for companies, the WCIT Awards are for the entrepreneurs. So there is no reason why the leaders of our LBBs shouldn’t win a WCIT Award too. Indeed Tony Pepper from LBB Egress won the Developing Entrepreneur Award last year.

2015 award categories are as follows:

'Young Entrepreneur'
'Emerging Entrepreneur'
'Developing Entrepreneur' 
'Enterprise Award' 
'Social Enterprise Award'
'Judges' Award'
'Female Entrepreneur'
'Public Sector Innovator'

and

'Evergreen Award'– The award sponsored by TechMarketView for entrepreneurs who set up businesses after the age of 50

If you would like to apply for any of the Entrepreneur Awards (I understand I am now a judge - so bribes are in order) you can complete the Entry Form Here. Entries must be in by 30^th Apr 15. For more details of the Entrepreneur Awards Click Here.

TechMarketView will be turning out in force at the Awards Ceremony at the magnificent Plasterers Hall on 4^th June 15. You are very welcome to join us. Again, if you would like a table or a ticket, Click here.

London-based digital marketing and merchandising platform developer Amplience  has raised a further $10.5m in a Series B round of funding led by Octopus Investments, along with existing stakeholders and investors including Northstar Ventures and Silicon Valley Bank. Octopus had led earlier funding rounds for Amplience totalling over £5m (see IndustryViews Venture Capital - Q3 2013).

Amplience is also one of some 30 UK SMEs participating in the London Stock Exchange Elite programme. Elite is a two-year programme for high growth private UK companies designed to help founders and CEOs develop their businesses in readiness for investment. It is supported by Imperial College Business School in conjunction with over 40 corporate advisory and investment partners.

Let’s hope it’s ‘onwards and upwards’!

The UK Ministry of Defence (MOD) has awarded CGI a contract to provide ongoing support services for the Fire Control Battlefield Information System Application (FC BISA) and the Fire Control Application (FCA) system.

Competition is rife in the non-embedded systems marketplace (providing mission planning, command & control or battlefield information systems) as the traditional SITS suppliers go head to head with defence contractors (see UK Defence SITS supplier landscape). CGI has been developing and supporting operational systems to this market for 12 years.

FC BISA is a distributed command and control application that helps the British Artillery and Infantry provide accurate and effective indirect fire support to the British Army during operations. CGI will provide software applications support for FC BISA and the FCA. The applications, which were developed by CGI, automate many operational functions to improve tempo, safety and accuracy. In addition CGI will provide hardware support for the FCA’s handheld computer platform. The new FCA system will be fielded to the Army during 2015 with MOD’s Daniel James, Project Manager commenting that “the latest version of the FCA software, improving both safety and accuracy over its predecessor.” There is scope for the contract to be extended to provide enhanced support for operational deployments and capability enhancements.

CGI was ranked 5^th in our defence SITS supplier ranking and over a 35 year period has built deep technical expertise (software solutions, systems integration, secure hosting services) and domain knowledge (CGI provides training across the MOD including business, logistics and management information to frontline operations).

Contracts wins such as this plus recent wins at North Wales Police , NHS Shared Business Service, the Ministry of Justice’s (MoJ) and National Security Vetting Solution (NSVS) will further cement the UK as CGI’s star performer.

Frankly we’re running out of superlatives to describe Accenture’s results (see Accenture beats again). In the call with investors it was digital, digital, digital that rung out loud and clear as the key driver for Accenture raising its FY15 guidance for the second consecutive quarter, to 8-10% growth in local currency (lcy). Its shares were up almost 7% on the news.

Q2 headline revenues were up 12% (lcy) to $7.5bn (up from 10% last quarter), and up 5% in US dollars. The forex impact was actually higher than expected at 6.5%. But it’s the underlying lcy growth, which tells the real story – this is accelerating in double digits, and enabling Accenture to stretch its lead over the competition. Accenture’s operating margin also hit 13.6%, up 30 bps on the year.

Digital services grew 20% (lcy) during the quarter and now account for c20% of Accenture’s revenue, according to CFO David Rowland. This is a dramatic jump and reflects Accenture’s recent M&A investments (see here and work back), including federal government digital player Agilex last month. But there’s clearly also growing organic demand across the piece. Examples included a digital customer service and analytics strategy for a global telecoms provider, and an early stage opportunity around the Internet of Things (IoT), working with Visa on a mobile payments service for the 'connected car'.

While Accenture has the levers on these new growth lines, its traditional services are benefitting significantly. Consulting revenues were up 11% (lcy) to $3.84bn and outsourcing was up 13% (lcy) to $3.65bn.

Accenture has repositioned itself to offer services to customers at each stage of their digital journey from consulting, advisory, to implementation and operations. In fact, Rowland pointed out that BPO is one of the most significant drivers of growth in digital – something that we would concur with. Underlying processes and operations need transforming too, and while digital is a new capex cost for many, BPO can offer means to mitigate that (see Why is digital customer experience key to future BPS delivery?). 

Accenture seems to have got the messaging around digital spot on. CE Pierre Nanterme said ‘Digitization is all about helping…clients tap into new sources of value and new sources of revenue to create competitive advantage… to become the disrupters in the new digital world, not the disruptive [disrupted]’.

This really is the crux of the matter, and why organisations are freeing up spend so readily.

I didn’t want to release this information in case it was considered price sensitive. Last thing I wanted was to ‘move markets’. But I can now reveal that since Tuesday this week I have an iPhone6 having been a Blackberry user since…well so long ago that I can’t remember.

I can now reveal this news as today Blackberry has released its Q4 results which showed revenues down another 32% at $660m yoy. That was way short of the $786m expected. Smartphone sales were down a staggering 47% at 1.6m despite the launch of the Blackberry Passport and Classic (the model that I was awaiting but, alas, fell short of expectations) I read in The Telegraph that Blackberry still has 700,000 users in the UK but ‘this number is expected to fall to 400,000 by 2017’. This comes as no surprise.

I loved – still love – my Blackberry Bold. It is the best email sender/receiver ever invented. Its physical qwerty keyboard is still better than the puny iPhone6 touchscreen. Its battery lasts for days too. But, it can’t really do anything else.

RIP.

I do wonder whether our government did even a basic sanity check on the smart meter rollout programme. The plan is to replace 53m existing gas and electricity meters in 28m premises in the UK by 2020.  

Suppose it only took just one hour to replace the meters in a single premise. Switch off the supplies, detach existing meters, install new ones, reconnect, test. Probably have to drill new holes in walls for the new meters. May have to replace old wiring and gas pipes.

So, 28m premises, an hour a premise, 8-hour working days, 220 day working years. I reckon that comes to some 16,000 installer-years’ work to be completed by the end of 2020. That would require around 3,000 installers working full time right now to get the work done. I have yet to see a number for how many installers are currently on the job. I doubt it is 3,000.

So I do take issue with the Government response to the House of Commons Energy & Climate Change committee (see Smart meters: progress or delay? Which do you think?) published yesterday, the gist of which is ‘don’t worry, be happy’!

The Government has already admitted to a 4 month delay to the build and test of the communications infrastructure that will support the roll-out, originally scheduled for December 2015, and now reset to April 2016.

But my real concern is Government’s head-in-the-sand view on the meter installation workload: “We have not seen evidence to date that there is a shortage of meter installers and (a) number of energy suppliers are at an advanced stage in developing their installation workforces…”

The premise behind the programme was fundamentally flawed. The execution more so.

Sad to learn that the ITNEA is to close after some 16 years as EY have decided not to renew their sponsorship.

Set-up by Jane Tozer OBE and David Tebbs some 16 years ago, it was a great networking programme for IT NEDs and Chairmen - 600 members holding 1600 NEDs. Over the years, some 57 dinners have been held attended, on average, by 60 people each time. I had the honour of addressing the ITNEA in Sept 2010.. It also offered a great service recruiting NEDs.

ITNEA will be missed. But, whatever, huge thankyou to Jane and David for everything they did to keep this excellent programme on the road.

Only seemed like last week that I wrote Stocks in record territory as FTSE100 broke through 7000 and NASDAQ flirted with its all-time high of 5048.

Just a week on and NASDAQ has declined 3.2% at 4878 and FTSE100 down 2.4% at 6855. The FTSE UK Hardware Index fell 8.54% as ARM was particularly badly hit by analyst reports that smart phone sales were slowing.

To be honest, I’m unsure if anything really new occurred this week to cause this. We have been concerned for some time at the high number of risks around – from the outcome of the General Election, possible EU Referendum, Eurozone crisis, ISIS, Russia etc. But nothing immediately new.

We expect continued volatile times.

Managed services firm, Claranet, has announced a refinancing agreement, securing a long-term facility for the company. Goldman Sachs’ Private Capital Team has joined Claranet’s existing finance providers RBS, ABRYPartners and AresManagement. Ares and Goldman Sachs have provided a unitranche facility of £82m with RBS providing further support of a committed facility of up to £25m. Financing now extends to 2020.

Founded in 1996, Claranet remains a privately-owned company led by founder Charles Nasser. It operates in the hosting, networks and communications markets in six European countries, and has c800 staff in 16 offices. In the recent past, acquisitions have formed an important part of the company’s strategy to build out its European capabilities. In 2012, it acquired Star for £55m, and last year it acquired Echiron and Flesk (Portugal), Grita (France), NovaData (The Netherlands) and Celingest (Spain).

Going forward, Claranet has no specific plans to make more acquisitions (“We buy, but we are choosy,” says Nasser), but we have no doubt it will do so if the right targets come along. In the year to the end in June 2014, the company’s top line (including acquisitions) grew 24% to £127.4m (€175.8m). The UK business accounts for over half of that. Adjusted EBITDA was £23m (€31.7m), up from £11.7m (€16.1m) in the previous year.

cloudBuy duly delivered on its December revenue warning, see cloudBuy – jam tomorrow?, with full year revenue down 29% to £2.1m. With operating expenses up 80% as the company invested in its senior management, sales and support teams, pre-tax losses increased almost five-fold, to £4.6m. Following an October placing to raise £4.3m, the company had year-end net cash of £4.5m.

Over the year, the management of cloudBuy began transforming the business from a provider of UK Public Sector marketplaces into a global e-commerce provider. It has responded to the market opportunity by frenetically setting up operations across the globe, with some contracts signed and a big pipeline of opportunities. cloudBuy’s eCommerce and cloud computing solutions are now being used by Visa Asia Pacific to connect its community of users. 14 banks are offering cloudBuy services and the company is launching marketplaces in Hong Kong, India and Singapore. Sales activity and reseller recruitment is going on in China, SE Asia, and Australasia and now in the US and Canada. cloudBuy will receive revenue from system set-up, on-boarding, up-sell, web-site and analytics sales, maintenance and hosting fees and a percentage of the value of the sales transacted.

The UK business is now centred on the newly launched @UK Marketplace, a national marketplace for SMEs, and on activity for a care provider and a county council.

The management constantly quote large revenue expectations on various levels of service take-up and refer to the multi-billion dollar market opportunity. However, the reality is one of hard graft and the need for flawless, repeatable execution as they build a global business on narrow margins, with significant competition and complex inter-relationships. Yes, there is massive potential, but success will be hard-won. 2015 is a crucial year.

After a pretty miserable first half (see here), IS Solutions, the AIM-listed self-styled ‘full-service IT solutions company’ managed to get itself pretty much back to where it was a year prior, at least on the bottom line.

As the company is moving to a 31^st March FYE we will have to wait till July for the ‘real’ full monty results (for 15 months). But for the record, headline revenues for the 12 months to 31^st Dec. ’14, grew by 6% to £10.4m. Gross profit was hit by the problems in H1, down 8% to £3.8m, but good control on other operating expenses saw operating profits grow by 4% to £1.0m, a 9.7% margin, just a tad light on the prior year. Net profit was up a fraction to £802k.

The December acquisition of Speed Trap (see IS Solutions moves into data with Speed-Trap) of course had no effect on these numbers. But as we opined at the time, adding more bits to IS Solutions only serves to make the business even more disjointed.

We are very proud to announce the next twelve small-but-aspiring-to-be-perfectly-formed UK-based, privately-held software and IT services companies to officially join the ranks of the TechMarketView Little British Battlers.

They are:

• 2iC
• Becrypt
• ContactEngine
• Contego Fraud Solutions
• IEG4
• Keytree
• Logical Glue
• Oneserve
• Open Sensors
• psHEALTH
• Sentronex
• SharpCloud Software

The CEOs of these 12 companies will come to London on 22^nd April for the sixth in the series of Little British Battler days. They will have confidential briefings with TechMarketView research directors and senior partners from MXC Capital, the tech focused, AIM quoted merchant bank that actively invests in and advises companies in the UK tech sector, to discuss and get valuable feedback on their business plans and aspirations.

You will hear more about these exciting companies in UKHotViews after the event. Subscribers to the TechMarketView Foundation Service will also have access to more detailed profiles of the 12 companies in the forthcoming Little British Battler Report.

Congratulations to the management teams and staff at these companies for achieving one of the most sought after accreditations for small but aspirational UK tech companies. We look forward to hearing more about your businesses next month.

Commiserations to the many fine companies that didn’t make it through this time. But worry not, as there will be another opportunity to join the ranks of the TechMarketView Little British Battlers later this year.

Serco revealed deep losses and falling revenues in FY14, the culmination of an 'extremely difficult' year for the company (see here).

Serco has risen rapidly up the UK Business Process Services (BPS) supplier rankings in the past couple of years following its acquisitions of ‘white collar’ BPO players Intelenet and The Listening Company (see UK BPS Supplier Landscape 2014). Now these businesses are up for sale.

The fallout of the MoJ electronic monitoring scandal, the pending sale of its private sector BPO operation and plans to refocus the entire organisation on the public sector, means Serco will look a very different company in the future. It also means Serco will fall back down our BPS supplier rankings from 2015.

Subscribers to TechMarketView's Foundation Service, PublicSectorViews and BusinessProcessViews research can read our analysis on Serco's challenges and prospects for recovery in the new report Serco's long road to recovery.

Cloud provider, Outsourcery, has today unveiled its preliminary results for the year to the end of December 2014. Revenue increased from £5.2m to £7.4m – with 96% of turnover now recurring. Down at the EBITDA level, losses have improved from an eye-watering £8.7m to a slightly less eye-watering £7m. In its statement today the company went to some pains to explain its position as a “growth company”, and that it should not be viewed through the “same lens as an established firm”. Even still, there is no getting away from the fact that Outsourcery’s losses are about the same as its revenue. Furthermore, the company is not saying when it will move into profits – although it does say losses will continue to improve throughout this year.  

The company reduced the operating cost base by c£1m during FY14, which of course helps with the bottom line. However, what it really needs is a big injection to the top line. Key opportunities for it are in government (its new cloud platform for Central Government buyers comes on-stream in April), through partners (e.g. Vodafone), and via its own direct sales channel (to the mid-market and via a self-service portal in the smaller end of the market).The company won its first G-Cloud contract last month, see here.

We believe that during 2015, enterprises (of all sizes) will continue to assess which services can be moved to the cloud. However, we remain cautious about how this will happen, believing very firmly that organisations will move at varying paces – with some of the largest spenders moving very slowly indeed. And this seems to be something Outsourcery has learned this year: “Our own goals were too ambitious in a young market,” it says.

Instem, provider of IT applications to the global pharmaceutical development market, benefited from a recovery in the ‘preclinical’ and ‘early clinical’ pharma markets in 2014. After 2013, when its customers were reluctant to commit to any significant investment decisions, 2014 saw many of them revisit their near-term ambitions and re-evaluate their information management requirements.

The result was a strong second half performance for Instem and total revenue grew by 18% for the year to end of Dec 14 to £13.4m. Organic revenue growth in 2014 was a healthy 11%, driven primarily by increased sales of Instem’s Submit product. The 2013 Perceptive Instruments acquisition contributed 7% to revenue growth. Recurring revenue increased too – it now stands at 69% of total revenue, up by 12% to £9.2m. Within that, SaaS-based revenue increased by 20% to £1.8m.

By geography, demand for Instem’s products and services was greatest in North America where sales increased by 29% to £7.6m. New business in Europe was more muted reflecting lower levels of pharmaceutical R&D activity in the region. In the UK, sales declined by 14% to £2.1m (2013: £2.5m).

Unfortunately profits didn’t fare as well as revenue in the year. Adjusted EBITDA (excluding also share based payments) increased by 5% to £1.9m. But PBT decreased by £0.5m to £0.2m due to increased amortisation of intangibles, increased pension charges and net foreign exchange losses.

Nevertheless, there are good reasons to be optimistic about the outlook for Instem. It signed some encouraging contracts in the latter half of 2014, including a $7m/4-year deal with WIL Research – that’s significantly larger than Instem’s average contract size – and enters 2015 with an order backlog at record levels. The FDA’s December decision to mandate the use of SEND also bodes well for future demand. Indeed, Instem has already seen increasing orders for its SEND compliant products. In general, the pharma sector appears buoyant with total R&D pipelines up by almost 9% over the year. In short, CEO Phil Reason seems justified in feeling “particularly positive” about Instem’s outlook. Of course, it would be nice to see that translate into stronger margins too in 2015. 

Further to the news earlier that (conditionally) Quindell has sold its services arm to Slater and Gordon, as you might expect Quindell shares has risen by 7% this morning. At the risk of inducing nausea, I downloaded the three year Quindell share price chart. All the way up to over 600p in April last year. Then crashing to join the 90% (actually 95%) Club by December when their shares hit 35p and now up 4-fold since. Some pundits are calling Quindell to 300p! The roller-coater at Alton Towers has nothing on this!  

Whether you think that Quindell is just a great way to make – or lose – lots of money multiple times - or an example of all the very worst attributes of an AIM company  - is up for debate. But I think you can probably guess my views!

Quindell has agreed terms of the sale of its professional services division (PSD) to personal injury lawyers Slater & Gordon for an initial £637m in cash (see Quindell extends offer to Slater & Gordon). This follows the sale of its Nationwide Accident Repair business earlier this month (see here).

Quindell is in the midst of a breakup – in our view an outright admission of failure attempting to become an ‘all things to all people’ provider of outsourced services into the insurance marketplace. The findings of consultants engaged to look into the business were unsurprising – Quindell had become ‘stressed by over aggressive growth, both organically and via acquisition’.

Quindell will now shed other parts of the business until it is left as a much smaller technology business – comprising its assets in connected car and telematics (Himex and iter8), insurance claims management (Quindell Enterprise Technology Solutions) and insurance brokerage using telematics (Ingenie). The plan is to ‘prudently incubate’ these businesses – so we will see a return to much more modest growth.

Shareholders look like they will finally get some reward for sticking it out, with some £500m of the sale proceeds going to them. Quindell should get an additional bonus from S&G - 50% of net fees from 53k noise induced hearing loss (NIHL) cases.

If the sale completes, it will spark yet another round of management changes. CE Robert Fielding will join S&G, and Laurence Moorse (group FD), and independent non-execs Robert Bright, Robert Burrow and Robert Cooling, will all resign. Deputy chairman Jim Sutcliffe, who joined in January (see here), will also leave. The search for a new Quindell CEO will then begin again.

Civica has formed its first strategic partnership in Wales, with Denbighshire County Council to take over and run its revenues and benefits services over the next seven years.

The value of the deal to Civica wasn’t disclosed. But it is clearly a significant, since Civica will TUPE across 74 employees from Denbighshire and a set up a transactional processing centre – ‘Canolfan Elwy’ – that will deliver services to the council, and then offer them on a shared service basis to other authorities. Civica is guaranteeing savings of £200k a year for the council.

The shared service approach means that Civica is guaranteeing employment and potentially creating new jobs if the partnership is successful in selling to other authorities. We hear there are already signs of interest.

The platform-based model being deployed at Denbighshire is the same one Civica now successfully operates at Gloucester and South Worcestershire (see Civica local government BPS model gaining traction).

Civica takes over the existing R&B platform and runs it for the authority, which in this case, means supporting a Capita system. Each of Civica’s shared service centres work on a specific platform e.g. Civica OpenRevenues at the Severn Centre in Gloucester. The aim is to offer flexibility and choice to encourage other customers to join the service. This is a sensible approach, since although Civica owns its own revenues and benefits IP, by remaining platform agnostic, it is expanding its addressable market opportunity.

This means that Civica will continue to grow its market share in the local government BPS space, offering innovative alternatives to the big local government BPO deals of the past (see Public Sector SITS Market Trends and Forecasts 2014).