TIDMOUT
RNS Number : 6922K
Outsourcery PLC
27 June 2014
27 June 2014
Outsourcery plc
("Outsourcery" or the "Group")
Capital Markets Day Trading Update
Outsourcery plc (AIM: OUT) ("Outsourcery", the "Company" or the
"Group"), the leading Cloud Service Provider ("CSP") that helps
organisations of any size to reduce costs, increase productivity
and work better, is pleased to announce a trading update in advance
of its capital markets day for analysts and investors, which is to
be held on Monday, 30 June 2014.
This update provides a report on the Group's recent performance;
measures being taken to advance this progress; and the Group's
financing.
Capital Markets Day
Outsourcery is hosting a Capital Markets Day on Monday, 30 June
2014 for analysts and investors. The event will take place at
Microsoft's London offices at Cardinal Place, 80-100 Victoria
Street, London SW1E 5JL. During the event a series of presentations
will be given by senior personnel from Outsourcery's partners and
customers including Microsoft, HP, Vodafone, a mid-market reseller
partner and London Business School. These presentations will cover
the cloud opportunity and respective cloud strategies of these
organisations and their decision to partner with Outsourcery in
pursuing those strategies.
To register to attend this event, please contact FTI Consulting
on the numbers below.
Trading Update
We have continued to experience steady progress in generating
revenue from our partners in the Small and Medium sized Enterprise
("SME") space. As outlined in our Preliminary Results announcement
of 19 March, however, it is the activation of revenue generation
from our strategic Enterprise partner base and from our 'Secure
O-Cloud' pipeline (formerly IL3) that will have the most material
impact on revenue growth over the medium-term.
In recent months we have completed, as planned, a number of
on-boarding and integration processes with large Enterprise. We are
pleased to report that we now have increasing visibility on a
growing pipeline of opportunities from both their large Enterprise
and mid-market end-customers, some of which we expect to see close
in the coming weeks. At the same time we are in discussions with
new potential strategic partners with large customer bases,
significant sales forces and material revenue opportunities.
However, in spite of the pipeline, and certain important
contract wins that have taken place in the period, the large-scale
pipeline build of our strategic partner channel has taken longer to
ramp up due to delays finalising the necessary organisational,
system and their sales force readiness. This will have an impact in
the short term on the growth of our Monthly Recurring Revenue
("MRR") during the year and, consequently, an impact on our
reported revenue result for this financial year.
In response to this slower than expected MRR growth, the Group
has taken action to proactively align its cost base. As such, the
Group believes it is still on track to deliver a normalised PBT
performance for this financial year that is in-line with current
market expectations. The Group has reviewed all aspects of its cost
base and expect to produce additional annualised cost savings of
c.GBP1.0m per year from next financial year.
Operational Progress
During the period, we have continued to work closely with
Microsoft on the Secure O-Cloud (formerly IL3) platform build-out.
We are pleased to report that the build-out is on schedule, within
budget and due for completion next month with accreditation and
launch is still expected before the year end. We are delighted by
the number of inbound enquiries about the Secure O-Cloud we have
received from new partners, some of whom we expect to become large
strategic partners during H2 2014 with regard to this unique
capability. We are also hiring specialist and experienced public
sector sales personnel to promote adoption of the platform and
senior management are engaging directly with government. This
supports the decision to make this important investment which we
continue to expect will contribute revenue during FY 15 and
onwards.
We have also successfully continued to win business directly in
certain areas for O-Cloud deployment. In line with our strategy to
be the leading provider of Microsoft cloud services whether
deployed on our platform or Microsoft's, we are pleased to announce
a win of a 3,000 end-user Office365 deployment. This has led to
Outsourcery achieving 'Cloud Deployment Partner' status with
Microsoft for Office365 related solutions, which we typically aim
to integrate with our own solutions.
Funding
The Board believes that the Group has sufficient cash resources
for its immediate needs. The Board expects that the Group will
achieve monthly cash flow breakeven during the course of H2 2015,
at which point the Group should become strongly cash generative and
see margins expand due to the high operational leverage inherent in
the Group's business model at scale.
The Board is prudently reviewing a number of options that may
improve the Group's cash resources over the medium term as the
delay to the expected revenue growth will push out our monthly cash
flow break-even point despite the additional identified cost
savings.
The financing options include, but are not limited to:
-- Revision, amendment and/or extension to existing debt facilities; and/or
-- Investment by one or more of the Group's strategic partners; and/or
-- Raising of additional equity finance
The Board will update the market on its progress in
investigating these options during the course of July.
For further information please contact
Outsourcery plc +44 (0)330 313 0077
Piers Linney, Co-Chief Executive www.outsourcery.co.uk
Officer
Simon Newton, Co-Chief Executive
Officer
Investec
Andrew Pinder / Patrick Robb / Dominic
Emery +44 (0)20 7597 5100
FTI Consulting, LLP
Matt Dixon / Jon Snowball / Elodie
Castagna +44 (0)20 3727 1000
About Outsourcery
Organisations are increasingly considering how best to implement
and use cloud services, but many still don't fully understand the
cloud's potential - or how to access it effectively. Outsourcery
helps organisations of any size to make sense of the cloud, working
to change the ways in which they consume IT, enabling them to
expand, save money and work better.
Outsourcery's services remove the need for organisations to own
and manage expensive in-house, on premise IT systems, unified
communications, conferencing services, video applications and IT
infrastructure. Channelled through an extensive network of trusted
partners, Outsourcery's end-customers range from ambitious
start-ups to leading FTSE-100 companies.
Outsourcery has one of the broadest Microsoft-based cloud
service offerings available today. It covers hosted software
applications (software-as-a-service), virtualised servers
(infrastructure-as-a-service), next generation unified
communications and collaboration solutions as well as connectivity
and professional services that help to customise and integrate
solutions for partners and customers alike.
Outsourcery was the first company outside of the US to be named
Microsoft's worldwide 'Hosting Solutions Partner of the Year' and
is a Microsoft Certified Gold Partner with a total of eight
competencies, of which three are gold and five are silver.
Outsourcery is a founding member of the Cloud Industry Forum,
which sets standards for quality and transparency within the
fast-growing cloud industry. The company also adheres to rigorous
quality practices, holding ISO 27001, ISO 9001 and ISO 14001
accreditations, ensuring the highest levels of service,
environmental standards and information security. Outsourcery is
able to deliver 'Official' accredited solutions and is currently
working in partnership with Microsoft and Dell to develop a
separate secure cloud platform, giving Outsourcery the ability to
deploy accredited solutions for central government, enabling the
public sector to benefit from the cloud. Outsourcery employs 120
staff based in three UK offices, operates two UK data centres and
was the UK's first certified carbon neutral CSP.
www.outsourcery.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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