Profits up at firm that helps IT run smoothly

Joe Connolly the Chief Executive of Esteem Systems....SH1002030c..19th January 2015 Picture by Simon Hulme
Joe Connolly the Chief Executive of Esteem Systems....SH1002030c..19th January 2015 Picture by Simon Hulme
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THE YORKSHIRE-based IT services firm that helps Great Ormond Street hospital to run smoothly has achieved a healthy rise in its full year earnings.

Esteem Holdings, which dates from 1985, was established when the IT world was in its infancy. According to Joe Connolly, its chief executive, Esteem has prospered during periods of uncertainty by focusing on long term managed service contracts.

Mr Connolly, a long-serving IT entrepreneur who led the management buyout of Granada TV’s computer department in 1997, has just completed 10 years at Esteem’s helm.

Esteem has achieved a 14 per cent increase in reported full year EBITDA (earnings before interest, taxation, depreciation and amortisation) to £4m.

The Wetherby-based company said its turnover increased by three per cent to £34.7m, for the financial year ending June 2014.

Mr Connolly said: “These are a strong and positive set of results. The transformation of the business is seen by the fact that contracted revenues now account for 52 per cent of group turnover. Our managed services base increased nine per cent in the year, which is a reflection not only of our success in winning new business, but also of our retention of existing contracts by delivering exceptional levels of customer service.”

Esteem provides managed IT services to mid-market and corporate customers across the UK. It operates across a range of sectors including healthcare, higher education, professional and financial services.

Its clients includes Leeds Teaching Hospitals, law firm Irwin Mitchell, Nottingham Building Society and a number of universities. It has worked with Great Ormond Street since 2005.

Mr Connolly added: “Following these positive results, and our recent refinancing deal with Lloyds Bank, we are extremely well positioned to continue to accelerate the growth of our business.

“Coupled with our ‘maintain, transform, manage’ philosophy, significant new business wins, and the opportunities created by being chosen for the Government’s £6bn Technology Products Framework, we are extremely confident about our prospects for the future.”

Esteem provides services that help to manage customers’ IT infrastructures, from servers and desktops to applications, data and networks.

The company employs 225 people across the UK, including 55 staff in Wetherby.

In 2004, a company management buy-in saw private equity group Primary invest in the business. A new management team was brought in, led by Mr Connolly. Today, Primary Capital holds 61 per cent of the business, while the remainder is owned by the management.

In 2010, Esteem acquired SiRViS IT Holdings to help it increase its market share.

Mr Connolly told The Yorkshire Post that the company had decided to focus on managed services.

He added: “Managed services are contracted revenue that are either three or five year contracts.

“Consequently, we’re not going to have any dramatic increases, but what we’re going to have is a very steady growth.

“It will also increase the value of the business, because we can predict our profitability and our revenue for the next few years.

“We put together a strategy for the future with our private equity partners, Primary Capital, who have been very supportive of the business.”

Mr Connolly said trading had gone “very well” over this financial year, and the Wetherby area had a strong pool of IT service staff.

Esteem also offers a VIP service, and its clients include a US-based CEO of an international property development company.