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Phoenix talks up signs of progress

Simon Quicke

Phoenix IT Group has indicated that it is turning the business round and is making progress but more evidence of improvement should be seen in the second half of the year.

As a result of the negative impact of the strategy followed by previous management, led by the then CEO David Courtley to restructure the business to provide a platform for the future, the firm has seen a slow start to its first fiscal quarter, which finished at the end of June.

"As expected and explained in our preliminary results announcement of 3 June 2013, the issues that affected the Group last year are still having a negative impact on results. Management is working to resolve these issues, though any material benefits are unlikely to be evident before the second half of the financial year, with the first half likely to produce a lower result than the previous year," stated the firm in an interim management statement.

The partner services division, which was disrupted by the restructuring last year, under performed with the contract value and the order book down on last year at £183.6m and £303.6m respectively compared to £191.9m and £318.6m last year.

There was better news from the mid-market division, which the firm stated "is starting to show signs of improvement under new management and sales activity levels are improving".

"We have initiated the implementation of our new Virtual Shared Platform which is due to be completed by October. This will enable us to service better our existing hosting customers as well as take further advantage of the rapidly growing Cloud Services market during the second half of the year," added the statement.

"The business environment remains challenging and we remain cautious in the short term. We are planning for revenue growth in the second half of the year and believe the business can recover from the difficulties of last year," it concluded.


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