It would be good to be able to say the situation at business and IT consultancy Charteris was improving but given the latest trading statement, that’s not to be. The declining revenue trend of the last couple of years (see Charteris charts sliding revenues) continued into H1 2012 (ending January 31 2001) and revenues are expected to be ‘significantly lower’ than the £6.6m of H1 2011.
Cost cutting measures have had some impact on the business and reduced the break-even point. The best that can be said is that the reported operating loss will be of a similar magnitude to the operating loss before exceptional items in H1 2011 (£498K on revenue of £6.6m). That is a good sign, but there is an awfully long way between reducing the relative decline and generating profit. Although it is managing at the moment, cash flow could be a concern so the company is looking into alternative finance options.
The move to focus on Microsoft business solutions, spend-to-save initiatives in the public sector, and private sector consultancy ‘are giving grounds for some optimism’ but this positive indicator is outweighed by management comments regarding uncertainty about the economy and the markets Charteris operates in.
The statement that the company believes it can get back to profitable month-on-month trading - if economic pressures do not increase - sounds plaintive to our ears. It said the same when it released it full year 2011 results. Public sector consultancy is still hard to secure and austerity reigns (see TechMarketView Local Government Dinner Debate). The private sector is still spending and Microsoft’s own sales of Dynamics ERP and CRM were noticeably up in Q2 (see here) so there could be some hope of improvement for Charteris.