Software group aims to sidestep public cuts

The group, which has its MS2M compliance division based in York, is also plotting more acquisitions after the purchase of rival Cobent for 5.2m in March.

Access's software helps businesses and organisations cut costs around procurement, and also helps them comply with legislation around sensitive issues such as tendering contracts.

About half of its revenues come from the public sector, but it has been focusing heavily on private sector opportunities. Cobent, whose customers include the United Nations, opens up new opportunities where customers are forced to leave audit trails to comply with regulations.

"We have not got major exposure (to public sector cuts) from what we have heard so far," said finance director Jeremy Hamer. "But if we miss the crossfire completely that would probably be a miracle."

On new public sector work, Mr Hamer expects the decision-making process to be slightly slower. "We have gone into a little bit of a confidence lull," he said. To combat this, our sales strategy increasingly emphasises the cost-saving benefits of the product.

"Our product firstly is not particularly high-cost up front," said Mr Hamer. The group has developed a "software as a service" model, where customers license it instead of buying it. "That takes the pressure off expenditure," he added.

Access said pre-tax profits in the six months to the end of May almost trebled to 470,000. Revenues were up by a quarter on a like-for-like basis and, including acquisitions, up 63 per cent to 4.1m.

Its MS2M business works with financial services companies including RBS and Aviva to help them keep on top of compliance requirements and meet rules imposed by the Financial Services Authority.

Access said the constantly changing landscape for financial services companies "while providing challenges, also offers significant opportunities".

Access moved its group head office from York to London when executive chairman Michael Jackson arrived in 2008 and injected 1.3m into the business, pledging a "buy-and-build" strategy.

Mr Hamer said the group would like to pay a dividend, but that will depend on the scale of any acquisitions it makes and how much cash remains.

It had cash balances of 2.4m at the end of May, but he said not all of this will be spent on acquisitions.

"We could certainly spend 1m to 1.25m. If it's a really good synergistic bolt-on that would be a very good use of our cash."

However, he added anything larger would probably require the group to return to the market to issue paper, as it did with Cobent.

"At the moment I would not say vendors of businesses are actually thinking they have got to sell," he said. "But we are seeing some very interesting bolt-ons."

Access has finally sold Wired-Gov, its online publishing business, to management for 140,000. It said the business did not fit with its compliance strategy.

House broker Astaire Securities said the results show successful expansion into software as a service.

"Although some softness in its public sector-orientat ed businesses looks inevitable, Access Intelligence's products offer cost savings and a low entry cost. With Cobent, the business is also more broadly based."

Acqisitions and sales

The group's growth has been driven by acquisition and increased sales since it was established in 2003.

December 2003: Acquired Backup and Running, Wired Gov and The Marketing Guild.

June 2005: Acquired storage systems firm Ridgeway Technologies trading as Willow Starcom.

July 2005: Acquired business software developer Due North.

October 2006: Acquired MS2M, which develops compliance software for the financial services sector.

October 2008: Acquired research and information management firm Solcara.

March 2009: Sold The Marketing Guild.

March 2010: Bought Cobent for 5.2m.

May 2010: Wired-Gov sold to management.