Phoenix wins its largest ever business continuity contract

Phoenix IT Group plc yesterday issued an ‘Interim Management Statement’ which gave a trading statement and detailed its financial situation following the acquisition of ICM Computer Group. The statement also provided information on the company’s largest ever business continuity contract win.

“Since the last financial year end of 31 March 2007 the Group has completed the acquisition of ICM Computer Group which represents a significant event
in the continued expansion of the Group following the successful acquisitions of Trend (in 2004), NDR (in 2005) and Servo (in 2006),” the statement reads. “The total consideration (excluding costs) consisted of £61.8m in cash and the issue of 14,034,184 ordinary shares in the share capital of the Group. The Group also repaid approximately £10m of ICM bank debt. The cash element of the acquisition has been satisfied from new banking facilities with Royal Bank of Scotland plc
(replacing all existing facilities) comprising five year term, and revolving credit facilities, which total £130m, together with a further £10m overdraft facility. Primarily as a result of the ICM acquisition, the Group's net borrowings (including finance leases) increased from £27.7m at 31 March 2007 to £103.7m at 31 July 2007.”

The statement continues:

“Including Servo (acquired on 3 November 2006) and ICM (consolidated from 1 June 2007), Group revenues for the first three months of the financial year increased by approximately 57% compared with the same period last year. Like for like revenues, excluding acquisitions, were approximately 5% ahead of last year, with a resumption of growth in the Phoenix IT Services 'Partner' business, together with continued growth in the business continuity market. Operating margins are in line with the Board's expectations. Compared to June 2006, the like for like order book and annualised contract values increased by approximately 9% and 20% respectively and the Group has continued to be highly cash generative with cash generated by operations representing 135% of profit from operations in the
period.”

The new contract win highlighted in the statement was with a London-based top ten global investment bank and is worth approximately £12m over the duration of the contract term of three years. It is based around recovery services which will be provided by Phoenix’s new Farnborough business continuity centre and is the second major contract won for this facility.

http://www.icm-computer.co.uk/mk/get/farnspec

•Date: 7th August 2007• Region: UK •Type: Article •Topic: BC markets
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