IT & Telecoms managed services
Market Sector | IT/Telecomms - Managed Services
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Product | Range of hosted and managed services with Cisco exclusivity in Birmingham | |||
Business Stage | Early - Trading with validated sales pipeline | |||
Investment | £200k | |||
EIS Tax Relief | Yes | Valuation | £1.2m |
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Location | Birmingham | |||
In their first full year of trading at year ended 31.01.09 this business had generated sales of £300k and operating profit of £18k. The company was spun out of the family owned IT business in February 2007, when the Directors saw that convergence of Information Technology data communication & Voice based telecomm systems was now being more widely accepted as the way forward for business communication solutions. In addition the compulsory switch from analogue to digital by 2011 was now creating further opportunity and the Directors set about establishing a key differential between themselves and other less able suppliers.
They saw a gap in the market emerging between "box shifters" & telecom service providers and those who could truly provide a full turn-key managed service solution that would meet a growing expectation from a wide range of business customer's in price, variety and quality of services available. Core to the difference is the fully accredited partnership with Cisco they have established in record time, rewarding them with the "partnership nomination for the UK" to be announced in June 2009; for their innovative and unique approach, building one of only four demonstration suites outside of Cisco and the only facility between London & Manchester. As a result Cisco have granted them a specialism status for managed services in the Birmingham area, generating both Cisco and their own high value sales leads pushing them well ahead of sales projections with a growing qualified pipeline of which £2m+ is to be delivered by August 2009. Cisco referrals are largely all mid corporate size that ordinarily a young company like this would not be able to access however the Cisco partnership and marketing/sales support is proving lucrative and carries with it a full cross section of services so that average gross margin of 60%+ is seen as sustainable.
The executive management team will need additions with anticipated growth, but are ably led at present by an experienced woman entrepreneur who has good vision and drive for a future that is targeted at generating revenues of £4m by 2012, operating profit of £1.2m and a healthy recurring annual revenue stream with a good mix of services and strong mid corporate client base underpinning the business.
Equity funding of £200k is sought for which a regional fund is considering upto £100k at a proposed valuation of £1.2m with a trade sale exit a probable outcome within 3-5 years.
Projected Forecast
| 2009/10 | 2010/11 | 2011/12 |
Sales (m) | 2719 | 3345 | 3944 |
Gross profit | 1670 | 2113 | 2410 |
Overheads | 1050 | 1128 | 1169 |
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Net Profit | 620 | 985 | 1241 |