ANS Group reports ninth year of profit growth

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ANS Group, the IT infrastructure specialist, has set out plans to continue to drive growth after reporting a ninth consecutive year of profit growth.

Profit Before Tax increase from £1.8 to £3.1m – up 72%
Adjusted EBITDA increase from £3.5m to £4.3m- up 21%
Contracted revenues increased- 96%
Over 50% of company’s Gross Profit is now derived from Managed Services (32% in 2012).

ANS Group, the IT infrastructure specialist, has set out plans to continue to drive growth after reporting a ninth consecutive year of profit growth.
In the 12 months to 31 March 2013, the Manchester-based IT specialist reported profit before tax growth of 72 per cent to £3.1m (2012: £1.8m), through a continued focus on the award winning FlexPod i3 solution – making ANS the single largest provider of FlexPod solutions in EMEA.

In the same period, ANS’ contracted revenues increased 96 per cent, securing its dominant position in the market. Over the year, significant customer wins included Salford City Council, University of Cumbria, Greater Manchester CSU, LSG, Garmin (Europe)and WDS, a Xerox Company.

ANS’ sales reached £44m in the year (2012: £47m), although seeing growth in all focus areas of the business, the slight reduction in turnover was caused by the planned £6m reduction in government procurement service low margin pass-through sales. Adjusting for this one-off item shows an increase of 7% in underlying turnover.

The organisation has invested £1.4m in both capital projects and personnel over the year, enabling it to nearly double its managed service revenue and support solutions with a trained and accredited team of professionals. Staff numbers have increased by 30% and there has also been investment into the business’ southern team, with recent appointment of a southern sales director.

Further investment has been made to ensure that data centre capacity is future proofed for growth and that the highly qualified staff are fully trained and developed to meet the high service availability demands of our customer’s critical systems.

The company has also spent £500,000 in developing a bespoke, and fully integrated, Management Information system. The platform has been fully implemented across the company and will supplement its growth plans.

As a result of this continuing investment policy in both capital infrastructure and staff recruitment, customer retention within the business’ Managed Services division is 98 per cent.

Commenting on the business’ growth, Paul Sweeney, Managing Director of ANS Group, said: “Our strategic model of growing our fully managed service offerings, with our on-premise FlexPod i3 solutions and the momentum of i3 for cloud solutions, is driving our overall profitability.

“The growth of Managed Service and recurring revenues now accounts for over 50% of the total gross margin of the business. With the positive outlook for our services I would expect to see this figure reach 80% over the next two years.”

Scott Fletcher, Chairman and Founder, commented: “These positive results are a testament to the quality and dedication of our work force, which is now approaching 200. As we continue to recruit high quality individuals, with the working knowledge and expertise to deliver solutions, we can provide the high quality which often exceeds our customer’s expectations.

“The scale of our infrastructure solutions has been well publicised with some high profile wins in the North West to complement our ongoing commitments in the City of London and with major NHS authorities.”

To supplement its growth, ANS has implemented its “Cloud Academy”, developing new talent and reaching out to young people interested in a career in IT. ANS plans to bring in around 60 apprentices over the next two years and expects all graduates of the apprentice program to be retained by the business beyond the end of the 12 month apprenticeship.

As part of its planned expansion, two new members have joined ANS’ Board of Directors. Paul Shannon joins as Managed Services Director, taking responsibility for developing managed service solutions and joining as a key member of the team for winning new business. Steven Bomberg heads up the Professional Services and Projects team that, under his guidance, has successfully undertaken a number of customer deployments of up to £5m this year and migrated significant customers to managed services.

Describing the Business’s new investment, Chris Malthouse, FD at ANS Group said “the continued financial strength has allowed the business to invest in the key areas to form a position of strength and stability.

“We take our investment in both capital infrastructure, and staff training and development as the key drivers to our continued success. Our aim is always to be firmly ahead of the competition.

“ANS has a 16 year track record of profitable cash generation and we have strong cash management which puts the business in the enviable position of being able to satisfy all of the in-depth financial credit and buying criteria that our major clients require.”