Well, they certainly got their H1 results out quicker than their full year (which we only reported on in June! – see Invu heading in the right direction). Tiny UK-based document management software company, Invu, which is chaired by Daniel Goldman, son of Sage’s late founder, David, has reported that in the six months to end of July revenues increased by 4.5% to £1.32 million.
The company benefited from an improvement in its sales mix towards larger customers (84 new customers, compared to 112 in the comparable period, but with the average deal size up 26%), as well as a continuing successful relationship with IRIS. IRIS provides Invu’s document management product to the UK accountants market as an integrated offering under the IRIS brand – in H1, IRIS was responsible for 20% of sales to new customer sites.
However, digging deeper the numbers reveal that sales of software and related services were actually down – from £0.6 million to £0.5 million. While it was the sale of support contracts that boosted the revenues – up from £0.7 million to £0.8 million. We had previously commented that the focus on larger businesses within the SME sector would have a positive impact on maintenance revenue and that appears to be the case. However, it’s not great to see software and related services revenues on the downward trajectory at the same time. In addition, it was the European business (£39K of revenue compared to £5K in H111) that really drove growth. It looks like UK revenues managed an increase of just 1%.
Financially, Invu has taken a number of steps to strengthen the business. Its cost reduction programme has resulted in a 13.1% lower operating cost base. However, that was not enough to push the company into the black at the operating level – operating losses stood at £0.2 million compared to £0.4 million in the comparable period - despite our hope that the company had turned a corner at the end of last year when its H2 results showed a small operating profit. However, the Group did manage to cash generative at the operating level to the tune of £0.1 million.
Overall, Invu continues to battle on and is making positive progress but there’s still some way to go and the hill still looks pretty steep.