Phoenix: Q1 wobble but full year unchanged

Phoenix IT Group has released an interim management statement this morning. The company says the bedding in of its new organisational structure has impacted performance in Q1 (i.e. April to June). It therefore “continues to remain cautious” with regard to its H1 performance. However, the company also says that “the outlook for the year as a whole remains unchanged”. Phoenix shares remain similarly unchanged in early trading.

The only other detail in today’s announcement is on the group order book, which is slightly down quarter-on-quarter (at £293m, vs £315m at end March 2012).

We’ll let readers judge for themselves whether today’s statement constitutes a profit warning or not. The most important factor, however, is probably less the short-term disruption and knock-on effect on the Q1/H1 numbers, and more the full-year outlook. So we’re reassured to hear that the latter remains in place. Phoenix has been through a lot of organisational change since CEO David Courtley took over (see Phoenix: three become two become one), and that’s bound to take time to settle down. That said, today’s statement suggests that Phoenix’s turnaround is not quite where management hoped it would be at this point in time.

So, following this statement, which comes on top of an unimpressive set of FY2012 results (see Phoenix yet to show benefits of change), Phoenix really needs to begin to demonstrate the effects of all the hard change work by the end of the year. Yes, the market remains tough. But not showing signs of improvement is simply not an option for Courtley and Co.