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Civica is proof that it’s possible to grow in double digits in the UK public sector SITS market even in these straightened times. Its preliminary FY12 results reveal a 12% increase in total revenue to £205.3m and 12.5% growth in UK revenue to £143.8m, some 11% of which is organic. According to figures shared with us by Civica, the rest of the financial picture is also encouraging. EBITDA is reportedly £38m, a stable 18.5% margin; the order book increased by 15% to £700m and recurring revenue is up by more than 19% to £93m.
What is more, CEO Simon Downing tells us the UK growth is predominantly from its business with local authorities, a market which we expect to grow by just 3% in 2012 (see our recent UK Local Government SITS Market Trends and Forecasts report if you’re a PublicSectorViews subscriber). Civica, which now badges itself as a provider of public sector specialist systems and business process services, has a broad installed base of IPR customers including nearly 400 of the UK’s local authorities. It’s managing to sell more to these customers because they value its domain expertise and trust it to take on more, including the running of specialist services. Over the last year, for example, Civica has signed 80+ new software contracts, more than 100 new managed services agreements and has seen its investment in BPS (see here for more) begin to pay off with a number of new contracts in the offing. As you’d expect, it’s the offerings with a particularly strong ROI – such as electronic document management and e-payments systems – that are seeing the most demand.
The overall position – including opportunities in health and growth in its specialist BPS services in local government - is sufficient to give the management team confidence in the deliverability of future growth. As avid HotViews readers will recall, they’re aiming to double FY11 revenue and profit by 2015 with the help of acquisitions (see Civica: Ambitious plans in a tough market) and these aspirations haven’t changed despite uncertainty over Civica’s corporate future as its VC backers 3i consider their exit options (see Civica looks set for sale or flotation in 2013). If anything, we get the impression that the top team are more passionate than ever about the business and its future.
