Advanced Computer Software (ACS) is trading well thanks to its strong ‘spend to save’ message and expertise in growth areas such as mobile solutions for the health and care sector, 'shared services' and cloud enablement. As presaged in its March trading update (see here), revenue from continuing operations increased by 10% (8% organically) in FY12 to £98.2m. Total revenue, including the Cedar HR business sold to Capita in September last year (see Capita buys police HR software from ACS), was up 6.7% to £101.8m.
Operating margins held steady at group level - adjusted EBITDA for continuing operations (before amortisation of intangibles etc) was up 9% to £24.1m (FY11: £22.1m), whilst PBT for continuing operations more than doubled to £6.4m (FY11: £2.9m). Cash conversion is up 105% and net debt fell to just £1.1m (FY11: £31.2m), leaving scope for future acquisitions.
It’s encouraging to see all parts of ACS growing organically and the amount of cross-selling between them increasing. On an organic basis, the 365 Managed Services business, which accounts for 22% of total revenue, grew by 16%; Health & Care is up 8% (to 23% of the total) and Business Solutions, which brings in 55% of total revenue, grew by 6%. Revenue from cross-selling increased to £25m last year from a standing start.
The outlook for the business is equally encouraging – future contracted revenue is up 41% to £110m, 68% of which will be recognised in FY13 – and CEO Vin Murria expects continued growth in areas like mobile (where licence users increased 200% last year to 13k users) and community healthcare (where it’s just won its first two contracts thanks to the demise of the National Programme). We can also expect further acquisitive growth in the year ahead. Vin told us this morning that it would be ‘business as usual’ on the M&A front with further patient-centric bolt-ons or purchases that provide cross-selling or up-selling potential in Business Solutions a distinct possibility.