Cost-cutting software a hit in public sector

SOFTWARE group Proactis Holdings said its pipeline of opportunities is healthy after reporting a year of growing sales and profits.

The Wetherby-based company, which licenses its software to organisations to help them cut their procurement costs, said it added another 38 new clients during the year, winning upgrade deals from another 85.

Sales increased by 5.4 per cent to 7.4m in the year to the end of July, while pre-tax profits grew 14 per cent to 1.1m. The group hailed these results as a "tremendous effort, particularly when considered within the general economic environment, uncertain political climate and other factors that have adversely affected commercial and public sector markets".

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The group's software has proven popular among public sector organisations, despite the tough financial climate.

The group claims its software offers between 15 and 20 per cent savings on procurement costs, making it attractive amid a growing drive to cut costs in businesses and public sector organisations.

The public sector now accounts for a quarter of its sales and Proactis added eight new accounts to give it 113 public sector customers.

Proactis ended the year with cash of 3.5m and no debt. Net cash inflow during the year was 2.1m.

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"Our balance sheet is strong, with excellent cash conversion again and our product remains highly competitive," said chief executive Rod Jones. "Our pipeline has grown significantly this year and is currently very strong.

"We believe that this platform positions Proactis very well for the forthcoming year and that we will see continued growth in our business."

The group said the increase in its customer base, taking it to more than 300 organisations in 70 countries, across the public sector, private and not-for profit sectors, was a key achievement.

The group added all of its markets held up during the year, with the charity sector growing by six accounts to 49, making up 17 per cent of new licence revenues.The private sector generated 58 per cent of new licence revenue for Proactis, and it added 24 new accounts to grow to 133 clients.

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Proactis continues to develop its software, spending about 10 per cent of its revenues, or 900,000, on this. It plans to spend a similar proportion on upgrading software this year to keep abreast of the competition.

"We are in the best position possible," said Mr Jones. "Our product suite is complete and very highly rated."

It plans to increase its final dividend by 10 per cent to 1.1p per share. Proactis shares lifted 7.35 per cent to 34.4p.

Proactis was founded in 1996 and floated on the London Stock Exchange in 2006. As well as its headquarters in Wetherby, it also has sites in South Wales and the United States.

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Analysts at house brokers Daniel Stewart issued a buy recommendation said: "Its spend control and e-payment offering has increased relevance in a cost-conscious environment across all sectors."

Value for money at local authority

Bristol City Council recently upgraded its Proactis procurement and purchase-to-pay software.

The local authority has been a customer of Proactis since 2005. More than 3,500 council staff use the system, making more than 5,000 orders with about 9,000 suppliers, worth up to 8m per month.

"The team at Bristol City Council have taken up the challenge and are focused on managing every pound spent to deliver value for money and enhance the quality of public services," said John Charters, head of procurement at the council.

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"With Proactis, we have combined technology and best practices in order to drive the efficiency of suppliers and maximise spend visibility and control.

"The improvements we have made to the procurement and

purchasing cycle enable

us to far better capture savings opportunities, streamline and

automate processes and ensure purchasing compliance."

Proactis chief executive

Rod Jones said: "We are delighted to work with Bristol City Council and provide support in addressing their transformation objectives.

"Their vision and skills are extremely forward looking and coupled with the Proactis industry-leading platform, Bristol can face up to real challenges of cutting costs, driving change and achieving a step-change in operational efficiencies."