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IDE Group looks to a brighter future
Managed service player has got through three tough years and has made decisions that will enhance its growth prospects
Mid-market managed services player IDE Group has announced its first-half numbers and drawn a line under the last few years of turning the business around.
The interim results for the six months ended 30 June were issued just a couple of days after the firm revealed it was in advanced discussions to sell its IDE Group Connect subsidiary.
Revenues of £7.6m were up from £6.8m in the equivalent period last year and group profits of £3.6m were up on £2.5m. Adjusted EBITDA profit of £2.1m was a significant improvement on £0.5m in H1 2020.
“The first six months of the year have been a period of growth as we come out of the Covid-19 restrictions,” said Andy Parker, non-executive chairman at IDE. “The group has taken advantage of this period to continue to restructure the operational side of the business and has decided to concentrate on the profitable Manage side of the operations.”
The sale of Connect was seen as a moment to get the business finally back on track and discussions are advanced to sell the unit. Between 1 January and 30 June 2021, IDE Group Connect with Nimoveri made a combined operating losses of £1.4m.
“The Connect division has continued to struggle in H1,” said Parker. “A lack of scale has continued to hold the business back and the choice for IDE was to invest by way of acquisition to enable scale or sell the business to someone else.”
Having made that decision, the business is now looking ahead with the focus on its Manage business, which it had decided to back with investment.
“As can be seen from the half-year results, this division is showing good organic growth at a revenue and profit level, and it is our belief that this will continue over the next few years,” said Parker.
Looking ahead, the sale of Connect would offer the chance to deepen the focus around the Manage business and see a business delivering increased profits, he added.
“It has taken three long years to turn this company around, but I am truly delighted to say that at last, with the expected sale of Connect, we have a meaningfully profitable company with excellent prospects,” said Parker.
“The efforts of all staff involved in this turnaround cannot be underestimated. Some incredibly tough decisions have been made along the way, which has seen good people leave the business because the company neither had the scale or resources to keep them.”
Having made tough decisions, the firm is considering further steps to improve its finances, including looking into options to remove its debt overhang, to enable the firm to “prosper for all shareholders”, said Parker.
“This day has been a long time coming, but for the first time in three years, we can confidently look forward to a positive and rewarding future for IDE shareholders.”