On Monday the market will discover whether Business Systems will join the ranks of companies that have disappointed them as it unveils its maiden annual results.
If first half-year results are any indication, Business Systems’ prospects are grim. Although the e-business consultancy announced a slightly increased turnover of £17.6m, costs grew and performance fell short of expectations.
As a result, the group reported pre-tax losses of £145,000 compared to a profit of £495,000 for the same period last year.
According to the company, the loss was due to lower than expected activity in its consultancy subsidiary BSG. During this period, several customers deferred large projects causing gross margins to fall from 19% to 18%.
Other reasons given were reorganisation and flotation costs and the cost of acquiring Webgenerics – now Business Systems’ application service provider – and increasing its staff.
Mark Atkinson, Business Systems’ finance director, has his work cut out for him, but should be a great asset in bringing the company back to profitability.
Atkinson began his career at Deloitte Haskins & Sells where he became senior audit manager.
Prior to joining Business Systems, he was director of the asset securitisation group at Nat West.
Despite the negative signs, chief executive Nick Gerard said a brighter future was in sight. ‘We anticipate steady growth and a stronger second half.’
During the first half, BSG secured a number of contracts, and launched a new range of remote management services. Webgenerics also signed agreements with internet providers and web design agencies.
Last month, the company reassured investors saying: ‘In the second half of the year, trading has substantially improved.’ It said a strategic decision to focus on partnerships with organisations working with a known customer base had been taken.
One of the partnerships was with Compaq. The companies are offering an enterprise storage area network product to help companies increase productivity and reduce costs.
Business Systems’ latest product, is dotEncrypt, a product which allows customers to encrypt the content on their website and distribute goods and information in a digital format.
The company’s website is at www.bsg.co.uk
Interim results to 30 September 2000
Cost of sales: £14.4m
Operating loss: £416,000
Executive directors: Nick Gerard, group chief executive, appointed 1987; Mark Atkinson, group finance director, appointed May 2000
Auditor: Deloitte & Touche
Company profile: Business Systems Group Holdings provides full service 3-business solutions for the business to business market. The company operates in two subsidiaries: BSG, which enables clients to outsource their e-business needs and Webgenerics, an applications service provider that allows clients to create their own e-business soltions.
Business Systems floated on the techMARK index of the London Stock Exchange in July 2000.