Project Ladoga: Disposal of an IT support and telephony business

We are engaged to find a buyer for an IT support and telephony business providing customers with a complete IT service from selecting equipment, through to the install and integration. The business has a strong recurring revenue stream through customers renewing their support contracts with them and currently have c. 150 active unique customers providing recurring revenue.

A summary of the financial information is summarised below (Year end August):

P&L Summary

 

  2015

  2016

  2017

Total Revenue

 

 917,578

 900,876

 713,449

Recurring Revenue

 

 495,929

 477,277

 498,350

Adjusted EBITDA

 

 115,053

 120,430

 74,998

EBDITA has been adjusted to reflect only costs transferring to a new business and therefore excludes directors costs (who have minimal day to day involvement), property costs, professional fees and recruitment costs.

2017 was a challenging year as the Company had to replace a Sales Manager, this meant there wasn't one in-post in from 1 December 2016 through to 1 March 2017.  During the same financial year, the directors also highlighted an underperforming sales person who was removed. This left the Company 2 sales people down for a large proportion of the year, which in-turn resulted in reduced revenues.

A new Sales Manager has been in-post since 1 March 2017 and is starting to have an impact, however the directors are aware that this typically takes 6 to 12 months for them to become established. The other sales person has also been replaced and again once up to speed the directors are confident this will have a significant positive impact on overall sales levels.

As can be seen, despite the challenges on new sales, recurring revenue has been stable over the last few years giving the business a good base to build on.

For further information please contact:

Chris Sellars - Director                                                                            chris@mackenziespencer.co.uk                 

0114 267 0911  

or

Matt Milnes - Associate

matt@mackenziespencer.co.uk

07931 444161