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Daisy to wind down acquisition spree

Alex Scroxton

Acquisitive comms and networking services provider Daisy Group has said it expects to wind down its acquisition spree in the coming months as it concentrates on achieving profitability.

In a statement marking the end of its financial year, Daisy said that whilst the Board would still consider anything that looked particularly tasty, the overall rate of acquisitions would drop.

Chairman Peter Dubens said: "We do not expect the volume of acquisitions to continue at the rate achieved to date.

"Increasing the number of products and services existing customers take from Daisy will become an increasingly important part of the Group's strategy to deliver long-term growth," he added.

The firm saw significant growth in revenue, adjusted EBITDA and earnings per share in the 12 months to 31 March. However the sheer scale of its consolidation drive meant it posted an operating loss of £15.8m, an improvement on losses of £20.97m this time last year.

Total sales were £266.3m, up 98.2 per cent on the restated 15 month period to 31 March 2010. Adjusted EBITDA was £40.65m, up from £10.97m. Daisy's post-tax loss narrowed from £17.48m last year to £7.62m in 2011.

Broken out by unit, Daisy's Wholesale division, which provides comms services to around 1,000 VARs at present, made sales of £31.6m, up from £13.6m in 2010, split approximately 60-40 between networks and data. Gross margins soared by five percentage points as a result of changing revenue mixes in favour of data products.

Daisy Distribution, which provides mobility equipment and airtime tariffs from O2, Orange and Vodafone, made sales of £38.1m, up from £11.6m in 2010.

Daisy Retail, the group's end-user facing business and the largest of the firm's three units, accounted for sales of £196.6m, up from £109.1m in 2010.

CEO Matthew Riley hailed a strong set of results considering the current macroeconomic backdrop in the UK, and said the firm's strategy of targeting the fragmented SME comms space had "positioned us well for future growth".

Separately, Daisy also announced the appointment of Steve Smith as CFO effective today, following the decision of Anthony Riley to step down to pursue other interests.


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