Profits fall at Phoenix IT Group

Profit before tax has decreased from £13.3m to £12.1m in the six months ending September 30, 2011. Group revenues have fallen to £132.3m, from 138.4m in 2010. The company said this was largely due to the loss of two contracts which contributed revenues of £6.6m in the first half of last year.

The Northampton-based company took over Birstall’s ICM Computer Group in April , 2007, in a £107.8m deal, merging its own continuity operations with those of ICM.

David Courtley, chief executive of Phoenix, said: “The group has delivered a satisfactory set of results, in line with the board’s expectations, against a background of challenging economic conditions. This has been achieved through sustaining gross margins and tightly controlling costs. Operationally we will remain focused on improving service to our customers, increasing our share of target markets and growing our base in hosting and Cloud services.

“The challenging macroeconomic environment and longer sales cycle have impacted the rate of new business wins in the last few months. Consequently the board’s current expectation is for a second half result in line with the first half of the current financial year.

“With its wide spectrum of relevant capabilities and facilities across an extensive foot-print in the UK, the group continues to be well positioned in its chosen markets, benefiting from a diversified customer base with good forward visibility and a high proportion of recurring revenue.”

The company’s interim dividend was 3.70p per share, compared to 3.50p per share in 2010.

Revenues in the business continuity division increased by 3.1 per cent to £29.4m. The company said revenue growth has “undoubtedly been impacted by continued uncertainty in the financial services sector”.