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Losses narrow at Outsourcery as sales rise
Piers Linney insists firm is on the ‘path to profitability’
By Hannah Breeze
Losses at cloud firm Outsourcery narrowed in 2014 as revenue rose by more than 40 per cent.
In 2014, group revenue rose 42 per cent year on year to £7.4m, driven mainly by a boost in recurring revenue, which grew 71 per cent to £7.1m. Its non-recurring revenue slumped by the same amount to £0.3m over the same period.
Losses narrowed from £8.8m in 2013 to £6.3m in 2014. The firm claims an organisational restructure meant it managed to save £1m in operating costs.
Outsourcery’s chief executive Piers Linney (pictured) insisted the company was on a “clear path to profitability”.
“Following a tough year during which we restructured our cost base, operations and go-to-market strategy, we have started the new year in a strong competitive position,” he said.
“Our commercial and public sector sales pipelines are growing. In the year ahead we will focus on ensuring that we maintain our competitive advantage as well as embracing exciting new opportunities such as the launch of our carrier-grade Skype for Business service.”
Outsourcery Confident In “Path To Profitability” As 2014 Loss Narrows
Outsourcery PLC Monday expressed confidence that it has a “clear path to profitability”, as a rise in revenue driven by contract wins helped it to post a narrowed pretax loss for 2014.
The cloud-based service provider posted a pretax loss of GBP7.6 million, narrowed from a pretax loss of GBP9.3 million in 2013, as revenue rose to GBP7.4 million from GBP5.2 million. It had also booked GBP495,000 in costs relating to its listing on AIM in 2013.
Recurring revenue, a key target for the company, made up GBP7.1 million of the total revenue, up from GBP4.1 million a year before.
The company cited contract wins during the year as a driver of growth, including users within three FTSE 100 companies and the UK’s National Health Service.
Gross margin improved to 45% from 36%, and the company expects the figure to improve further as it gets more business against a stable cost base.
Outsourcery said that after unanticipated delays had hit its revenue growth during 2014, its large strategic partners have now launched, and it is beginning to see benefits from this.
During 2014 and going into 2015 it has adjusted its go-to-market strategy, saying it is now focusing its resources on a more limited number of committed partners, and mid-market and enterprise direct sales.
“Our commercial and public sector sales pipelines are growing. In the year ahead we will focus on ensuring that we maintain our competitive advantage as well as embracing exciting new opportunities such as the launch of our carrier-grade Skype for Business service,” said Co-Chief Executive Piers Linney in a statement.
“Following a tough year during which we restructured our cost base, operations and go to market strategy, we have started the new year in a strong competitive position,” Linney added.
Shares in Outsourcery are trading down 8.2% at 28.00 pence Monday morning.