Newspaper article The Journal (Newcastle, England)

TSG Back in the Black after Solid Trading Year; TECHNOLOGY

Newspaper article The Journal (Newcastle, England)

TSG Back in the Black after Solid Trading Year; TECHNOLOGY

Article excerpt


THE Newcastle software firm launched by Sage founder Graham Wylie is back in the black after continuing to build up its recurring revenues.

Latest accounts for Technology Services Group (TSG) show the IT company boosted operating profit from a loss of PS628,000 to PS32,000 following a solid year of trading in the 12 months to March 31 2017.

Adjusted operating profit - not including goodwill amortisation and exceptional costs - also rose from PS387,000 to PS902,000.

Turnover dipped by 5% in the year to PS32.8m, which the company said was expected, as customers switch their IT services to subscriptions rather than traditional project based service delivery.

As TSG continues to win new subscription, support and cloud based services, the firm said it expects this trend of falling turnover to plateau, meaning it can then rely on a consistent and reliable income stream based on those contracts.

The Great Park-headquartered firm embarked on a cost-cutting exercise in 2015, streamlining the business and launching a London office to seize opportunities in the south, while also focusing on rebuilding recurring revenue.

That strategy is continuing to bear fruit, with monthly recurring revenue now accounting for 66.3% of total turnover compared to last year's 60.6%.

Early this year the firm will launch its Traveller software product, which sees the firm work with rail operators on their Delay Repay compensation schemes for travellers affected by disrupted train services.

Last year saw the firm plough an extra PS672,000 into the development of Traveller, and its membership software package Tribe.

Since the end of the financial year the firm has agreed new group funding facilities in a bank funding package of PS4m, to replace the existing bank overdraft and shareholder loans from Mr Wylie. …

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