Parseq, the AIM-listed software and BPO provider for the financial services sector, has won a three-year “multi-million pound” outsourcing contract with existing customer Lloyds Banking Group to include HBOS. Parseq will now provide BACS payment debit and credit processing services and call centre support to Lloyds and HBOS’ corporate, commercial and retail customers, which will run on its own processing platform. This is interesting because Parseq is the company formed out of the reverse takeover of Intelligent Environments (IE) by BPO provider Documetric last June (see Intelligent Environments – end of an era). Investors sent Parseq’s shares up 16% on the news.
Parseq, which has still yet to launch its own website by the way, has been quietly integrating the various business units it pulled together since the launch last June. These are the Documentric, IE, Mobinetic, and Avance Group divisions, the latter of which it acquired last August for £1.3m. Avance is a receivables outsourcing and loan process manager that needed £1.1m in working capital (although it is expected to turn cash positive in FY11). Avance will boost Parseq’s forward revenue significantly – in FY09/10, it generated £11.9m in revenue and made an operating profit of £500k. Parseq expects revenues in the year ended 31 December 2010 to be c£17m with an operating margin over 20%.
Profit in FY11 looks more challenging however. The company issued a profits warning in January, after admitting it faces increased investment in sales and IT, and continued delays in clients' decision making, and is adjusting to its own changed mix of products and services. It does however expect to deliver double-digit organic growth. Mobinetic, its mobile banking platform, which runs on the iPhone, Android and Microsoft devices, is going to be increasingly important. As of January, Mobinetic, is now live for two clients with two further orders signed, and the take up from the existing user base is apparently over 20%.