Online search specialist finds way to profit after cutting costs

SEARCH and marketing group Infoserve delivered an operating profit for the first time yesterday.

The Leeds-based group said it has cut costs and it continues to invest in strategic partnerships, new product developments and sales. Infoserve helps small and medium-sized enterprises (SMEs) to improve their online marketing performance.

It made half-year underlying profits of 133,000 in the six months to September 30, an increase of 149,000 on the same period last year, and plans to spend the next six months consolidating its position as one of the UK's leading online local search specialists.

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Although the core business continues to perform well, profitability was achieved through tighter financial controls, with turnover remaining relatively static at 2.9m, a fall of 1.8 per cent.

Executive chairman, Steve Barnes, said: "We have seen many of our SME customers go through difficult trading times this year, so I am proud that we have adapted our product offering and value proposition to maintain volumes and revenues.

"We have seen little improvement in confidence levels, even from those business sectors that are experiencing growth, and discretionary marketing spend by SMEs, even in the online sector, has been affected.

"I am therefore pleased with the half-yearly results, the revenue figures, and the continued driving down of costs. These successes are a testament to the entire team at Infoserve."

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The group opened a new sales centre in Leeds at the end of August, which now employs 29 people.

Mr Barnes said that although he sees little change in macro economic circumstances in the economy as a whole, the group has not completely written off growth in the short term.

"However we are anticipating difficult times ahead for all businesses and that's why we have placed greater emphasis on adapting the group to the current economic climate.

"Our new Joint Venture with Iliffe Newspapers and our opening of a further sales office in the centre of Leeds demonstrate our continued plans to grow, but we will do so slowly and in a planned, steady and risk averse way in keeping with the current economic climate."

The group said it has insufficient distributable reserves and therefore the directors do not recommend the payout of a dividend.

The shares closed flat last night at 3p.

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