IDE Group revenue tumbles, considers sale of Connect business
Company is now conducting a review of its business following a 15% decline in overall revenues
IT managed services provider IDE Group is to undertake a review of its operations after its revenues took a dive during 2020.
The Bournemouth-based MSP has reported a widened pre-tax loss for the year, after its Manage and Connect businesses both saw a considerable decline. Overall revenue totalled £24.1 million, down 15% from the £28.2 million recorded back in 2019.
Revenue for IDE’s Connect division totalled £13.1 million, marking a 10% drop year-on-year from £14.6 million as the company lost more of its cloud customer base.
For its Managed division, revenues ended at £11.5 million, tumbling 22% year-on-year from £14.7 million - largely attributed to some cyclical variability in its supplies to system integrators.
However, IDE says the difficult year was important for the “ongoing rationalisation” of its trading business, with the company well-positioned for “a period of sustained growth” in 2021. Outlook for its Manage business remains positive.
“Trading in the current financial year remains buoyant in our key Manage business with current financial performance significantly ahead of our 2020 results and reflecting the excellent business relationships that we have developed with third-party system integrators,” said Andy Parker, non-executive chairman of IDE Group, in the company’s 2020 results report.
“Overall, despite the operating losses in our overall group in 2020, in the current year we are now seeing the real benefits of focussing our business strategy on profitable partnership channels and consolidating our group offering across the Manage and Connect operations and we can look to the future with confidence and expect to generate positive operating cashflow for the first time in several years.”
However, despite the optimism around its Manage business, IDE did reveal that it is conducting a review of its operations – and that includes considering a potential sale of its Connect business.
“Given that the Group results reflect the very different levels of performance across two distinct business sectors we have commenced a full review of our operations,” IDE explained.
“This review is focussed on growing momentum within our managed services business while we decide how best to return value to our shareholders in the networking and connectivity arena, which may or may not include the divestment of the Connect business.
“This review is ongoing and is a priority for the Board and management team.
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