Phoenix IT rises from the ashes as profits return after difficult spell
Phoenix IT yesterday released its annual results, which showed the beginnings of the IT firm again taking flight, after a difficult time.
Chief executive Steve Vaughan told City PM “the results demonstrate we’ve got stability”.
Referring to the firm’s previous problems, he commented: “A whole year without screw ups, hand grenades and ‘oh good griefs’ – for Phoenix that’s a transformation.”
In November 2013 customers suffered as a major outage at Phoenix’s datacentre left them without service. Earlier that month Phoenix had been removed as a partner by Cisco due its failure to deliver services.
Yesterday though, things were looking more positive. Phoenix announced profit before tax of £8.8m for the year ending 31 March, a £38m improvement on the year before.
However, revenue was down nine per cent to £212.4m, and underlying earning before tax, interest, taxes, depreciation, and amortization was down 11 per cent to £27.1m.
The firm also posted a reduction in net debt, which fell £7.1m to £49m.
Phoenix, a managed services and cloud computing company, has been the subject of a takeover approach by telecommunications firm Daisy and private equity firm Toscafund The Phoenix board has recommended the deal, which values Phoenix at £135m, with Daisy paying 160p a share to Phoenix shareholders. Now the deal hinges on approval from Phoenix shareholders.
Vaughan described the proposed deal as “a good exit for our shareholders”.
Vaughan also believes that the two companies have similar customers. “If you look at our customer base and the Daisy customer base, we both address the middle market,” he said.
“Does it represent a logic, which in particular our customers would understand? I think it definitely passes that test,” he said.
Shares in Phoenix ended trading yesterday up 0.32 per cent, at 156.6p a share.