Infoserve turns in a profit and plans 50 new jobs

LOCAL search company Infoserve Group pledged to create 50 new jobs by opening a call centre in Leeds after reporting its first pre-tax profit.

The Leeds-based group, which helps small and medium-sized businesses increase their prominence in online searches, said it is expanding its sales force to grab more of the market.

The expansion, which is set to be sealed soon when Infoserve signs a lease on a new building in central Leeds, will add to the company's 130-strong sales force in Darlington.

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Infoserve hopes the operation will be running by mid-August, and executive chairman Steve Barnes said Leeds provides a good pool of talent.

"There are more of these (paid-for searches) able to sell than people able to sell them," he said.

"Ours is a nice industry to work in. There's a premium of younger people (in Leeds) and they can relate very easily to the concept."

Productivity per salesperson increased by 15 per cent over the year to 62,775 per person annually.

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Infoserve's former chairman, Master Cutler James Newman, recently left the group to focus on other business interests.

He was replaced by then-chief executive Mr Barnes, who took over as executive chairman.

Infoserve said the job consolidation makes sense given the size of the company.

Mr Newman helped to guide the Leeds group through its flotation in June 2006 and recently set up new funding arrangements with the group's major shareholder David Hood.

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Pace founder Mr Hood took 83 per cent of the company's equity in a debt-for-equity swap in January, in return for converting a 2m loan into shares and providing another 800,000 facility.

Mr Barnes said the group has no plans to de-list, in spite of the expense of maintaining a stock market listing. "We have no plans to change our status," he said. "With 83 per cent David looks at his options from time to time."

Mr Barnes said the debt restructuring gives Infoserve two years' funding: "We have got a never-ending continuing improvement programme for our products."

The group believes that local paid-for search will continue to grow and will fuel the market share increase of online advertising versus traditional media.

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The group yesterday reported that turnover for the year to the end of March increased by 11 per cent to 6.1m. Profits were up 1.1m on a year earlier, helping it break even for the first time, reporting a 6,000 pre-tax profit.

Founded in 1999, the company has been battling the might of search engine giant Google for years. "It's a real milestone and significant for the whole team," said Mr Barnes. "Clearly there's a brand that has done brilliantly in paid-for search.

"But we're at the very difficult end. It's been a great learning curve. We've had lots of time to establish relationships with SMEs. They know who we are and they trust us."

In spite of the tough market for advertising as businesses cut budgets, Infoserve has benefited from the flight to online advertising.

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The online advertising market grew by four per cent in 2009 in spite of the recession. "Demand will continue to keep growing," said Mr Barnes. "We're well positioned – paid-for search is one of the few growth areas. 2010 and the first half of 2011 are going to be quite tough for everybody.

"But I'm optimistically cautious, or cautiously optimistic."

He said Infoserve is concentrating on business categories where it is seeing the most growth, such as debt collection, to make up for areas where growth is stagnant, such as mortgage broking.

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