Services shift delivering for SCC

The plan to move to a services business is in full swing at SCC as it latest financial results illustrate

Around six years ago the powers that be at SCC sat down and mapped out the strategy for the company and at the heart of their plans was to move away from traditional hardware sales and into services.

Last November's insight into the financial results at the half year point provided evidence that the plans were working with revenues from the data centre side of the business improving by 90% year-on-year to deliver £11m revenue in the first half. Services was also up by 11% to £69m.

The channel player has now followed those numbers up with the full year set, for the 12 months ended March 2015, with its services business generating even more of the turnover at the firm.

Although full year revenue was down by 13.3% to £662m there were signs that those areas that are going to be the long term future are growing with services up by 22% year-on-year to £159m, responsible for 24% of total revenues.

Gross profits were also up by 15% with the share of that coming from services increasing by 11% in the fiscal year to account for 55% overall. profits before tax came in at £12.4m, up 20% on 2014.

The customer list gained by the services division in the year was impressive including, Kier Group, Samworth Brothers, Grafton Group, McDonald Hotels, United Utilities, Department for Work and Pensions, and WHSmith.

Breaking down the detail on the services business the professional part grew by 11%, managed services was up by 13% and flexible resourcing also made its contribution.

On the data centre services side there was also a strong performance with monthly recurring revenue increasing by 100% compared to last year and the group bringing in an annualised run rate of£34m.

SCC is still aiming to reach £50m EBITDA by financial year 2017, with the performance of its services division being key to its success in reaching that ambition.

SCC Chief Executive James Rigby (pictured) said that it was “firmly on track to achieve its 3-year target of £50m EBITDA" given its position at the end of the latest fiscal year.

"We now have a sizeable Services business to further our growth and margins through recurring revenues," he added “Cloud Delivered Managed Services is the way forward for SCC. We have already started our next phase with a £10m investment in our own Data Centres, building additional data halls at Birmingham and Fareham facilities to increase capacity to 3,000 racks in FY16 to cater for CDMS growth of up to 60%."

The channel player issued some guidance about the year ahead for the UK business with the services operation expected to top £200m, cloud services should get to the £55m mark.

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