Triad, the long-established IT staffing firm, and now also software product hopeful, has broken even at an operating level in FY11, following three years of losses, thanks in large part to continued cost cutting in administration expenses (down 28%) and headcount (costs down 34%).
For the year ended 31 March, operating profits were £40k vs. a £770k loss last year, although revenue continued its five-year downward trend, declining 16.7% to £19.4m. Triad blamed the decline primarily on a continued reduction in public sector spending and its decision to focus on business offering ‘relatively high margins’. Clearly, there’s still plenty of room for improvement on that front.
Triad’s troubles are long and well documented in HotViews (see here and work back). Its reorganisation in the past year, into two operating divisions, resourcing and consulting and solutions, has apparently received positive response from both staff and clients. Unfortunately, this hasn’t helped stem a decline in both areas. Resourcing, by far the larger of the two, fell 13.5% to £16.7m, although made an operating profit vs. loss last year. This revenue slump is even more disappointing when compared to Triad’s larger IT recruitment rivals Adecco, and Michael Page, which notched up high single digit growth in the UK last year (see Adecco UK sees IT recruitment jump and Michael Page hits the billion).
Consulting and solutions, the smaller, but supposedly higher margin business, actually made a loss of £600k vs. a £1.7m loss last time, on revenue that was down 32.5% to £2.7m. The impact of the decline in public sector spending was again blamed as the primary cause. This division provides ICT consultancy, intranet and extranet development, business and location intelligence and support services.
Triad’s Zubed location intelligence products are the core to its future growth plans. It is looking to integrate these into Microsoft, open source and mobile software, and has now developed apps for all of the major platforms including Apple and Android. Converting this into new revenue streams and growth for the business in 2012 will be the real test. But there is scant detail on how it might achieve this.