17th Sep 2014 09:16
LONDON (Alliance News) - ServicePower Technologies PLC Wednesday expressed confidence in seeing strong profit growth in the second half of 2014, despite swinging to a loss in the half year to end-June, as the strength of sterling compacted revenues.
ServicePower provides software for the field service management and outsourcing markets.
The company posted a pretax loss of GBP930,000, swung from a profit of GBP219,000 the year before, as revenue declined to GBP6.2 million from GBP7.3 million. In the previous year, results benefited from a GBP600,000 foreign exchange gain.
Revenue was hit by the timing of contract signings, customers moving to purchasing software as a service rather than an up-front perpetual licence, and the strength of the pound against the dollar.
The company's ServiceOperations business saw revenues up 14%, boosted by an increase in revenue from its contract with Best Buy Co Inc and by the launch of new clients. This business is expected to see growth accelerate in the second half as it launches AB Electrolux on its ServiceOps platform.
ServiceScheduling revenues dropped 27%, mostly due to sales moving to the software-as-a-service model, and pipeline opportunities being delayed into the second half of the year. Since the end of the half year, licence sales in this business increased, and the company said a number of deals are scheduled to close before the end of 2014.
ServicePower said that it had more than GBP5 million secured in future revenue under contract over multiple years under the software-as-a-service model.
The company said that it had made solid progress in its strategy in the first half of the year, investing in the development of a connected services platform, marketing, brand awareness and strengthening its organisation structure. It said that this had led to a doubling of its sales pipeline over the last nine months.
"With good visibility of customer implementations and a doubling of our sales pipeline, we are confident in achieving strong growth and growing profitability in the second half of 2014 and beyond," said Chief Executive Marne Martin in a statement.
Shares in ServicePower were trading down 11% at 6.2512 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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