Northgate Public Services (NPS) has won a five-year contract with the Joint Council for Cosmetic Practitioners (JCCP). The deal will see NPS establish a UK register of approved practitioners providing non-surgical cosmetic treatments.

The JCCP is a newly established ‘self-regulating’ body for the aesthetics industry. It aims to assist members of the public who are considering or undergoing non-surgical treatments (injections, fillers, laser, peels and hair restoration) and ensure practitioners demonstrate competence and proficiency. Its Practitioner Register and Register of Approved Training Providers launched at the start of March 2018, replacing the previous Treatments You Can Trust (TYCT) registry.

NPS has good experience in the sector having worked with TYCT for several years. As part of its contract NPS will collect data from member practitioners and monitor their performance against a set of educational, clinical and practice standards agreed by the Cosmetic Practice Standards Authority and JCCP. The JCCP Register is expected to build to 5,000 practitioners over a four-year period.

This is the first deal that NPS has announced since its acquisition by NEC in January (see Northgate Public Services ready to ‘run’ with NEC). We expect to see synergies develop during 2018 helping NPS secure further deals in the UK and aiding expansion into wider geographies (see UK Public Sector Supplier Prospects 2018 for further discussion).

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I was reading the good news story in today's FT that the European Investment Bank (EIB) has finally given the go-ahead to back a £120m investment fund for the UK North East, run by the North East Local Enterprise Partnership. The funding decision was suspended after the UK triggered Article 50, setting off fears that the European funding tap would be turned off once the UK leaves the EU, and that, in particular, venture funding of UK companies would wither and die (OK, I exaggerate a tad – but that was the mood music in some media).

Actually not.

Read more in UKHotViews Extra (but only if you subscribe to any of our research services or UKHotViews Premium!)

Agilisys has proven once again the strength of its relationships with existing clients. Extensions have been a big part of its story over the last few years (for example, see Agilisys extends contracts with multiple clients). This time the extension is with City of London Corporation (CLC) and City of London Police. The extension takes the contract through to August 2020.

Agilisys was selected as the strategic IT transformation partner, delivering a full range of technology services across 120 locations, for CLC back in 2013. Towards the end of 2014, City of London Police joined the fold (see Agilisys extends partnership with City of London Corporation) and Agilisys began to support joint working across the organisations. The original deal was for five years with the option to extend for a further two – an option which the organisations have chosen to take up.

There is one particularly interesting part of the extension – a “social value return” element. Agilisys will support its client in improving digital skills within the inner-city London Boroughs. It will do this through a combination of apprenticeships, work experience placements and digital training workshops. Examples of the projects it will deliver include work experience placements for 14 to 18-year olds attending City of London Academies; creation of opportunities for Level Four apprenticeships with Agilisys partner, Arch Apprentices (see UKHotViews archive for more on Arch); and digital training workshops targeted at social excluded groups.

Agilisys CEO, Andrew Mindenhall, pictured centre (with another one of his splendid handkerchiefs!) signing the deal, appears to have given the organisation a new tagline: “digital transformation specialist for the public sector”. It’s apparent that most IT services providers want to be seen this way. However, Agilisys does often seem to be ahead of the curve in aligning its contracts with the emerging needs of the local government sector. ‘Phase 1’ of digital transformation in local government has been, mainly, about channel shift. As we head into a more mature phase, we believe that authorities will increasingly focus on changing citizen behaviour to reduce pressure on public services in the longer-term. Providing residents with the right skills to a) make use of digitally-enabled services and b) to set them up for the world of work is just one way of doing that.

The long awaited results from K3 Business Technology Group– 17 months, to 30 November 2017 due to the decision to reset its financial year end– serve as a baseline to mark future performance against.That baseline begins with revenue of £118m for the 17 months to 30 November 2017 with an operating loss of £14.8m. In the 12 months to 30 June 2016 revenue was £89m with an operating profit of £5.2m.

K3 has reshaped the management team, reduced costs, integrated and streamlined its structure, reworked its strategy around its own IP and raised £7.75m from a share placing. All that costs. Combine those activities with softening in its markets and the SaaS/subscription model shift and it has all taken a toll although management says the company, that provides ERP, cloud solutions and Managed Services to the retail, manufacturing and distribution sectors, is ‘repositioned for profitable growth”.

As we’ve noted before (see here), K3 did need an overhaul and credit to the management team for undertaking it but how much has really changed? K3 still has all the offerings it previously had - notably Microsoft Dynamics, Sage, Syspro, its developing K3 IP portfolio and Managed Services – but in a new (albeit more streamlined) arrangement. There have been no divestments which leaves the company still wrestling with the costs of a broad portfolio.

The most strategic change is the intensified focus on its own IP - vertical market capabilities built onto third party products like Microsoft AX and its agnostic cloud platform and applications. This platform, currently called Imagine (previously Next Gen), is positioned as a key driver although as information is hard to find, this could be a challenge. The IP segment is small: £23m revenue in the reporting period with £10m of that from acquisitions (Merac, DdD Retail), however there were signs of growth towards the end of the period. There is still work to be done on K3’s growth initiatives. 

Facebook’s public image keeps taking more of a battering as each day passes.

Yesterday Mark Zuckerberg refused a request to appear before the DCMS Select Committee – offering to send a couple of ‘underlings’ instead. Damian Collins, who chairs the committee, described this as ‘astonishing’. I can understand him being a bit busy right now but, as I have oft-said, it is how a company deals with a drama that is more important than the drama itself. So far, Facebook gets ‘null points’.

Update– Unconfirmed reports from US news media say that Zuckerberg WILL appear before Congress in next few weeks. I guess it is a bit difficult for him personally to appear before the equivalent in every country that now has ‘issues’ with Facebook…

Although I fully realised that Facebook collected a lot of information about me. I did not realise that it might include details of the phone calls or texts I had made. But a guy in New Zealand downloaded his archive data from Facebook (which an increasing number of people are now doing) only to find about two years of phone call metadata incl. names, phone numbers and length of call. Facebook has denied that it had collected this data but admitted that other 3^rd party Apps might well have done.  I guess we are all guilty of ‘Agreeing to the T&Cs’ without reading them when signing up for new Apps. But I guess we all expected Facebook to ‘protect us from evil’.

Update – FAANGs tank

The FAANGs had a pretty awful day yesterday. Alphabet down 4.5%, Apple down 2.6%, Amazon down 3.8%, Facebook off 4.9% and Netflix suffering the worst – down 6%. Other tech stocks like Twitter (down 12%) and Tesla (down 8%) also suffered.

TechMarketView clients and HotViews Premium subscribers can read my views on the current travails at Facebook – and the other FAANGs – in HotViews Extra – FAANGS Yesterday Today Tomorrow.

At a special education event yesterday, Apple announced a new iPad targeted at the school market. The launch, which took place at a public school in Chicago, revealed a marginally cheaper (from £319), slightly faster iPad that now supports the Apple Pencil, as well as new software tools and upgraded iCloud storage.

The event is part of a concerted effort by Apple to regain lost ground in the education sector, particularly in the US where it used to dominate. As we discussed in our Student Data and Analytics report last year, Chromebooks have revolutionised the US K-12 market. Futuresource data shows Chrome OS accounted for nearly 60% of shipments in Q4 2017, Windows was 26% and iOS just 11%.

Although Google has found it harder to get schools to embrace Chrome OS in the UK, it has seen impressive adoption of G Suite and its Google Classroom platform. Microsoft still dominates in UK schools in terms of devices and Office 365. It has countered the threat of Chromebooks, which cost from £140, by launching a range of Windows 10 devices aimed at school, which cost from $189 (c.£135).

iPads remain popular in UK schools and they still dominate the tablet space, but in these cash-strapped times its unlikely that schools will be rushing to purchase the new iPad. Even after Apple’s education discount is applied the new iPad is twice the price of the cheapest Chromebook or Windows devices, and that’s before you add the £89 pencil and the cost of a keyboard, and the new software is unlikely to challenge Google’s and Microsoft’s dominance in schools. If Apple really wants to win back the education sector it must try harder.

Healthcare software provider EMIS has announced an extension of its GP Systems of Choice (GPSoC) framework agreement with NHS Digital through to the end of December 2019. The framework is an important one for EMIS and the three other suppliers currently listed – TPP, In Practice Systems (Vision) and Microtest– as it’s the basis by which they supply IT systems and services to all GP practices and associated organisations in England.

Under today's agreement, EMIS will continue to provide Lot 1 services (GP Clinical IT system functionality, support and hosting) on a ‘business as usual’ basis – although with a series of agreed changes - whilst a new replacement framework and supporting services are established. We expect the other suppliers on the GPSoC framework to come to similar arrangements. The current framework expires at the end of 2018 and the target start date for the new framework is the summer of 2019, although we wouldn’t be at all surprised if this date slipped to the right.

It’s already clear that NHS Digital wants the next iteration of the framework to look rather different to GPSoC, and this poses a risk for the current suppliers. NHS Digital says it “wants to develop the GP IT market to meet growing needs in new models of care and in federated GP practices.” To this end, NHS Digital is designing a new GP IT delivery model including commercial, technical and operating arrangements. It’s talking to a wide range of users, stakeholders and suppliers to help develop this future model and is seems likely that whatever form the GP IT Futures framework takes, the current GPSoC suppliers will face a more competitive market come 2020.

Related TechMarketView content that might be of interest includes:

·      EMIS results overshadowed by NHS Digital SLA issues (UKHotViews)

·      EMIS fails to meet NHS Digital obligations (UKHotViews)

·      EMIS Group: Welsh GP framework update (UKHotViews)

·      UK Public Sector SITS Supplier Rankings 2017/8 (PublicSectorViews report)

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When we updated HotViews readers of the progress of this provider of esports in February, see Gfinity building its esports credentials, we signed off by saying that management’s key test will be how it monetises the rising levels of activity and turns the tide in terms of both losses and cash flow.

Management have now upped the stakes yet further by placing 20% of its share capital to raise an additional £6.7m. The money will be used to fund the next two seasons of Gfinity’s Elite Series in the UK, incubate an Elite Series in Australia and continue the development of the company’s digital esports platform. This follows a £7m placing in October last year.

The placing accompanies Gfinity’s half-year results which showed a doubling of revenue, to £1.8m with losses ballooning to £7.7m, up £4.2m on the last six months and over 4x the level of last year’s first half.

Gfinity are pushing hard to establish themselves as the go-to provider of large scale esports tournaments as well as the technology partner of choice for other regions and the prime source of streamed esports content. These are significant ambitions and will likely continue to consume cash and shareholder patience for some time.

Looking nearer term, the company highlights a huge amount of interest in the forthcoming UK Season 3 of the Gfinity Elite Series, with high profile teams joining the event and a deal with Facebook for exclusive streaming rights (presumably as Facebook attempts to reinforce its appeal at the younger end of the market).

It looks like this event will provide a key test as to how the esports activity can drive revenue for Gfinity and begin to reverse the flow of cash from shareholders’ pockets.

Bloomberg has reported that it has spoken to sources that claim Apollo Global Management is considering an IPO for Rackspace. While we don’t comment on media speculation, the timing is interesting as in a recent research note (Rackspace: Reaping the rewards of going private?– subscribers only) we examined the performance of the UK business and what the future might hold.

In the report we explain:

“The company’s portfolio of offerings has broadened and deepened, and it has shown it can turn in the wins whether it is up against a £20m competitor or a multi-billion pound competitor. This consistency of performance has been an important factor in the improved performance in 2017 over 2016.”

In our view, the firm is shaping up well and we would be very surprised if an IPO were not being considered. Furthermore, if the Bloomberg source is to be believed, the process could kick-off sooner rather than later - i.e."before the end of the year".

Read more about our views on Rackspace here: Rackspace: Reaping the rewards of going private?

The fatal crash last week involving an Uber self-driving car has had knock-on effects on the rest of the sector. See UBER accident – Significant implications.

Last night Nvidia, which has risen high on the back of the use of its chips in self-driving cars, fell 7.8% as it announced a global ban on tests on public roads. Meanwhile there are rumours that a Tesla vehicle was also involved in another fatal crash in Mountain View, CA. Tesla was also hit by Moody’s downrating them to negative – warning of the need for another cash call. Tesla was down 8.2% on the day.

NCC has moved forward on its divestment plans with the sale of its Web Performance business to Eggplant (formerly known as Testplant) for cash of £7.5m.

Last Summer’s Strategic Review by NCC saw the company conclude that the Web Performance business had little strategic overlap with the Group's core cyber security and business continuity activities. In the company’s first half results, NCC explained that both the Web Performance and software testing businesses were up for sale – see Resurgent NCC Group grows H1 revenue 4%.

A little over a year ago, Dr John Bates joined Eggplant as CEO with a remit to lead the company into “the next phase of growth and global expansion.” The company is backed by the Carlyle Group and specialises in user-centric, digital automation intelligence solutions that enhance the quality and performance of the digital experience. These services are closely aligned with the Web Performance business.

I was catching up with the news on 'hybrid' estate agent Purplebricks' recent fundraising and profit warning and noted the appointment of a kluge of non-exec directors, including Civica chairman and founder, Simon Downing. Also joining the Purplebricks board are Just Eat's current Global COO, Adrian Blair, and its former Group CFO, Mike Wroe (so they should be OK for a quick chicken tikka masala) plus, of course, some bloke from Frankfurt-listed media giant Axel Springer, which tossed £125m into the pot in the aforementioned fundraising. Axel Springer bought in at 360p per share – an almost 30% premium to Purplebricks' then share price – and will own 11.5% of the stock. The investment is to accelerate US expansion (see Purplebricks to take bite out of Big Apple) as well as the usual growth things.

The profit warning from Purplebricks – chaired by ex-Capita CEO, Paul Pindar – was not the best news, especially after coming under scrutiny on its revenue recognition policy in early February, a claim firmly refuted by the company. The warning was attributed to subdued market conditions in the UK "due to some underlying macro issues and exacerbated by the recent periods of poor weather" driving down demand. Management also blamed taking 10% of their ground troops out of the field for 10 days' training, though surely the effect of this could have (should have?) been anticipated. As a result, management expects to close the year (to 30th April) 'only' doubling revenues (FY2017: £46.7m) which will be some 5% light on market consensus. This will of course also hit profits - well, losses, actually, being some £8m in H1.

Having said all that, Purplebricks' share price – currently 294p – is still nearly three times its 100p IPO price back in December 2015. Its shares were worth £5 last July so one can only assume Axel Springer believes in a timely revival of the UK property market. Not sure many others do, though!

Congratulations to the management of FreeAgent, the UK-based provider or SaaS accounting software solutions for micro-businesses. Having IPO'd in late 2016, it has been purchased at 5x revenue, £53m, by RBS.

In a fragmented market, FreeAgent looks to have a comprehensive app, with many value-added features, including good dashboarding, templated forms and systems to support tax reporting. All very positive.

After a 4Q 2017 rollout, over 10,000 RBS customers are “signed up to use the FreeAgent solution”. RBS plans to operate FreeAgent as an “independent member of the RBS Group”, offering the solution across its customer base. RBS expects the acquisition to help differentiate its banking business proposition for UK SMEs and that access to FreeAgent’s expertise will enable the bank to accelerate product development and capture opportunities as industry-wide changes such as Open Banking are adopted. All very laudable.

In our recent Financial Services IT Market Trends and Forecasts report, we discussed the move by established banks to adopt Fintech innovation to accelerate their rate of change and to improve customer interactions. The FreeAgent deal is part of this trend, but the RBS team needs to be clear - this is not the complete solution. A huge amount of work needs to be done to change the culture, decision-making processes and management across the RBS megalith to enable FreeAgent and other Fintech purchases and partnerships to thrive. Otherwise, how can they infuse the RBS organisation with the vitality and entrepreneurial spirit so desperately needed.

How many similar deals have worked out? How many enthusiastic newcomers have eventually been overwhelmed by the white corpuscles of bureaucracy and old-style thinking?

FreeAgent’s strapline is “For managing your business it’s the whole enchilada”, the RBS top management now has the responsibility to ensure that it doesn’t turn into a dog’s breakfast!

As indicated in its recent H1 trading update (see Tracsis delivers a solid H1), traffic and transport data services provider Tracsis plc has had a solid start to the year.

Group revenues (six months ended 31 January 2018) were up 16% to £18.1m (H1 2017: £15.6m). Its Rail Technology & Services division achieved sales of £9.2m, up 17% on this point last year (H1 2017: £7.9m) and revenues for its Traffic and Data Services division improved by 15% to £8.8m (H1 2017: £7.7m).

Operating profit margin for the period was 13.7%, up from 11.7%, and operating profit improved by 35% to £2.5m (H1 2017: £1.8m). Profit before tax was up 33% to £2.4m (H1 2017: £1.8m) and adjusted EBITDA was up 21% to £4.3m (H1 2017: £3.5m).

Its strategic investment in Vivacity Labs (see Tracsis takes stake in data player Vivacity) is showing “promising results”. In H2 Tracsis will begin the adoption of its 'Felicity' software, which utilises Vivacity technology, to support the shift towards machine learning for processing video capture. It anticipates that the transition will take more than a year to complete, but it should lead to significant cost savings through faster turnaround times and improved accuracy.

Following the good start to the year, management are confident that full year results will be in line with expectations.

Software and IT services supplier Advanced has been working with virtual health tech business Sensely to relieve pressure on the NHS 111 service. The partnership has seen West Midlands Integrated Urgent Care Alliance trial Ask NHS, a virtual health assistant app, to help triage users to the most appropriate health services and provide self-care advice.

NHS Sandwell and West Birmingham Clinical Commissioning Group (CCG), acting on behalf of 16 CCGs across the West Midlands, launched the Integrated Urgent Care Service in November 2016. It combines NHS 111 access and out of hours GP services in the region that covers a population of close to five million people.

The Ask NHS app, which launched in April 2017, integrates with the West Midlands NHS 111 Clinical Assessment Service, the NHS National Directory of Services, EMIS Web and NHS Choices. It is based on Sensely’s Learning Engine with Advanced’s Clinical Decision Support technology Odyssey forming the basis of the app’s symptom checker feature.

The Ask NHS symptom checker is delivered by voice through the app’s interactive virtual health assistant or via a text-based chatbot. In the trial 63% of people who completed the symptom checker were recommended to contact 111, 14% to visit their GP, 12% to call 999 and 12% to follow self-care advice. The cost and time savings achieved through the use of the app have helped to reduce the burden on health services in the region.

Ask NHS is just one of the healthcare app services that have appeared over the last couple of years, such as those developed by Babylon Health, My mHealth, Push Doctor, Now Healthcare, Ada Digital Health etc. With the government's announcement that every patient in England should be able to achieve seven tasks, including access NHS 111, via an app by the end of 2018 (see Hunt announces expansion of digital services in the NHS) we will see these types of services proliferate and the market become increasingly competitive.

With two acquisitions in March alone, 2018 looks like it will be a busy year for UK-based business software and services provider Advanced as it builds its portfolio, expands and looks to new markets. Where the first acquisition of the month - Science Warehouse - contributed to the acceleration of Advanced’s cloud strategy, the second is about expanding its international footprint: Canadian Information Balance will support the push into North America.

It will add useful functionality too because the Information Balance application portfolio analysis tool will contribute to Advanced’s application modernisation and transformation proposition which is gaining traction e.g. the Department of Work and Pensions. Although this is a small acquisition it is a smart one as it has the potential to open doors for Advanced, not just in North America but also by enabling the company to talk to customers earlier in their application migration processes.

With three acquisitions (the first being SaaS ERP provider Hudman Solutions) since its own acquisition by Vista Equity Partners in 2015 and subsequent transformation, Advanced has already made significant progress; 2018 is shaping up as another year of positive movement. 

We take our cases with us in the minicab when we travel to the airport and we check them in ourselves. Others may prefer to pay someone else to handle their baggage, and one such service is UK startup Airportr. Founded in 2012, Airportr has raised £5.3m in a Series A funding round backed by existing investors Stobart Group, Hargreave Hale and Force Over Mass Capital.

In 2016, Airportr became BA's official baggage pick-up service, so well done them! The plan is to extend the service to other airlines and locations (currently Heathrow and Gatwick airports only). There are other baggage handling services in the market but having BA's imprimatur is clearly a plus. If Airportr can make money from it, that would be a greater plus.

Intercede, the Leicestershire-based cybersecurity provider, is on the hunt for a new CEO. In a somewhat surprising turn of events, Richard Parris, Intercede's founder, is ceasing his roles as Chairman and Chief Executive of the Company and will become a Non-Executive Director with immediate effect. No reasons for the move have been given.

Intercede, which had been going through some tougher times of late, appeared to have turned the corner. Last FY’s falling sales and deepening losses reported in March 2017  (see here) had been stemmed. The interims posted for H117 (to September 30) showed top line revenue up 29% to £3.7m with a 23% reduction in the loss for the period, to £2.1m (see here). There were also encouraging indications on the new business front driven by a marked uptick in sales of its cryptographic key management-based MyID product.

Former Vodafone America chairman Chuck Pol, who was appointed as Intercede's Senior Independent Director nine months ago, takes up the reins as Non-Executive Chairman. Given that there remains an urgent need for the company to both reduce its over reliance on the US market and accelerate the expansion of its new cloud-based offerings, it must be hoped that the position of CEO does not lie vacant for too long.

A pre-close trading statement from iomart shows the cloud and hosting firm will hit growth of 9% in the year to end March 2018. Adjusted EBITDA grew at a similar rate to £39.8m.

The company’s Cloud Services segment has “continued to win a substantial amount of new business” during the 12 months, as the trend for buyers to seek external cloud specialists for guidance and ongoing management continues.

Acquisitions have played an important role in the development of iomart over the years, and in the year just closing that is no exception. The period sees a full year contribution from Cristie Data (a Stroud based data storage, backup and virtualisation solutions provider) and contributions from Dediserve, Simple Servers and Sonassi (all acquired in 2017). These acquisitions have all added to iomart’s geographical reach and expertise.

Meanwhile, the firm's Easyspace business (which provides hosting/web services to small and micro businesses), has performed in line with expectations, growing organically.

iomart’s approach is consistent, as is its performance (see iomart continues consistent cloud execution) – and we see no reason why it shouldn’t continue to do well in the market.

Full results are out 12th June.