Advanced Computer Software (ACS) has, once again, proven that it is possible to grow strongly in the UK public sector IT market despite tough economic conditions. ACS, which derives around 60% of its business from the public sector in the UK, expects 20% headline revenue growth in its first half taking turnover for the period to no less than £56.7m. Some 10% of that growth is organic. Adjusted EBITDA (before one-off restructuring costs, acquisition costs and share based payments) is up 10% (8% organically) to no less than £13.2m.
The fastest growing part of the business is the managed services division Advanced 365, which expects organic revenue growth of 21% (excluding the results of the recent Fabric Technologies acquisition, see ACS adds Fabric to the mix). Advanced 365 continues to find Advance Business Solution’s customer base a fertile hunting ground, especially for its cloud-based offerings, and has signed a number of multi-year deals in the first half.
It's good to see Advanced Health & Care growing strongly too – the division is expecting organic revenue growth of 18%, thanks to success in the emerging NHS 111 market and growth from its mobile solution, iNurse (see our UK Healthcare SITS Market Trends & Forecasts 2012 report for background). Advanced Business Solutions is the slowest growing division but it still managed a market-beating 5% organic growth as its ‘spend to save’ message hit the mark with local authorities and other organisations.
The acquisition of Strand Technologies (see here) and ACS’ recent investment in Avia Health Informatics, which provides clinical decision support for primary care workers, give ACS a position in the community and mental health markets and should help to boost growth further in the months to come. According to CEO Vin Murria, further bolt-on and strategic acquisitions that enhance the product set, open up new markets, or expand the customer base providing opportunities for ACS’ cloud-based solutions, are still on the cards. But of course we’d expect nothing less from Vin!