@UKPlc, the AIM-listed e-procurement software and services provider, certainly felt the pain in FY10 (to 31 December) with revenue down 11% to £2.05m, and adjusted pre-tax losses of £592k (vs. a loss of £799k in FY09). @UK implemented a cost cutting programme, reducing costs by 19% to £1.97m, which it said gives it a strengthened financial position. @UK is putting future hopes on its new Green Marketplace, which is aimed at helping companies reduce their carbon footprint. Chairman Ronald Duncan, said that it now has a “strong pipeline of customers for our ecommerce Marketplace and we look forward to a year of growth." However investors weren’t convinced and knocked 9% off its share price.
We recently met up with Doug McLean, CEO of one of @UK’s larger UK competitors Office Canopy Group – a £15.5m revenue e-procurement player with clients such as Bourne Leisure, owner of holiday brands Butlins, Haven and Warner Leisure Hotels. Like @UK, OCG is delivering its Fusion procurement system ‘as-a-service’ to customers. And McLean is certainly bullish on OCG’s prospects in the facilities management, leisure and retail and office supplies space, where there is large inventory of goods to be purchased. @UK will also compete against the likes of ProcServe, which runs the Government’s e-procurement system Zanzibar, and Aim-listed Proactis, which generated revenue of £7.4m in its FY10 (up 5.4%), and underlying profits up 18.3% to £1.3m.
@UK is clearly losing market share to these larger competitors – so we think it would find greater chance of success as part of a larger group. Whether one of its competitors sees value in its declining business however remains to be seen.