ANS Group demonstrates excellent results for 2011 in its latest Chairman's Report.
Headlines
• Turnover increased by £16.1m to £29.4m up 122%
• Gross Profit increased by £2.7m to £6.6m up 68%%.
• Operating Profit increased by £600k to £1.5m up 66%
• Cash reserves reduced by £556k to £3.7m due to acquisition financing
• Investment in Alpha acquisition
• Contracted revenues now £8m , 27% of annual turnover
• Further investment in managed services and cloud
Financial Review
ANS produce another excellent set of results during what has been a truly eventful year for the company. The business continued with its impressive record of year on year growth and this was achieved both by organic expansion and through the acquisition of Alpha Business Systems of Stockport which took place on 31st October 2010.
The enlarged group has increased Gross Profit by 68% to £6.6m and Operating Profit by 66% to £1.5m. The business delivered a 122% growth in turnover to £29.4m and the cash balance at the end of the year was only reduced by £556k to £3.7m despite paying the initial consideration of £1.75m in respect of the acquisition of Alpha Business Systems. Total annualised contracted revenues now stand at £8m and account for 27% of the annual turnover. The guaranteed future income line for all contracted revenues has risen to £14.5m which amounts to an increase in excess of 100% on the previous year.
The board is delighted that the acquisition of Alpha Business Systems and the continued development of the Infrastructure 3 solution has seen the business recognised as a leading independent data centre solutions provider. This investment will provide excellent opportunities to cross-sell the Infrastructure 3 solutions into the Alpha customer base and give the business the required critical mass to further develop the managed services data centre proposition.
Operational Review
During the financial year the delivery team’s capacity has more than doubled and, as the business moves forward, it is already obvious that the increasing size and complexity of our deals means that we will be constantly looking to recruit the most highly qualified delivery specialists in the industry to keep pace with the escalating number, and contract values, of projects.
During the year the delivery team broke all previous records with monthly delivered professional services days exceeding 400 for the first time.
The company is fortunate to have found an extremely capable director in Howard Johnson who joined the board with the acquisition of Alpha. He has taken on the role of professional services director with full responsibility for project delivery. Richard Gascoigne now focuses on our managed services offerings as managed services director. As business focus intensifies on our data centre solutions and managed services portfolio, Richard has demonstrated all the necessary skills to take up the challenge and generate the critical mass required to deliver a profitable performance from this exciting new division.
The integration and transfer of the Alpha business from Stockport to the head office in Manchester has been carried out with commitment and professionalism from all involved. The transition has been made as seamless as possible for the Alpha customers who now enjoy a relationship with the enlarged business. The benefits being delivered to the client base are clearly displayed through the success that the London office (acquired through the acquisition) is having with the growing number and size of Infrastructure 3 projects that are being won.
With staff numbers doubling during the year to 120 the demands of the business require ever more highly qualified staff to deliver our portfolio of solutions.
The managed services and data centre divisions have been tasked with driving this fast growing business forward in a controlled and sustainable manner for the future. Our managed services contract base has grown by 60% to £8m helped by the acquisition of the Alpha contracts. With current expenditure agreed, investment in the managed services offering is set to top £1m. Following the investment, the division is growing quickly and the financial outcome is expected to become positive before this coming year end.
Outlook
Despite the world trading conditions continuing in a fragile condition and much of the economic news being negative your board maintain a highly motivated attitude to take the business forward profitably, with the knowledge and confidence that the key solutions provide real opportunities for public and private sector customers to develop more efficient IT infrastructures that deliver real and long term cost reductions. Although the public sector has been targeted for spending cuts, the company has seen no significant changes in the level of business from this sector as our proposition is both cost-effective in providing long term cost savings and fits the localisation policy for IT systems being encouraged by the current government
ANS have a market leading proposition with Infrastructure3 and this is a key factor in the development of our data centre solutions and the private cloud environment. The business has invested wisely and, with a planned and well executed growth strategy, your board is confident that the business will continue to flourish.
“This has been another year of fantastic growth for ANS Group. The figures speak for themselves but there is more good news as we see tremendous potential in our managed services proposition. Crucially we have been able to retain the unique ANS culture through a period of acquisition and organic expansion; when you combine our talented and highly-motivated staff base with our well-planned business strategy you cannot fail to be excited about the potential for further growth.”
Scott Fletcher, Chairman and founder.
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