RNS News Item



27 January 2009

 

Phoenix IT Group plc

 

Interim Management Statement

 

Phoenix IT Group plc ('the Group') announces its Interim Management Statement relating to the period from 1 October 2008 up to the latest practicable date prior to the publication of this statement, 26 January 2009. Financial data is for the Group's third quarter (1 October 2008 to 31 December 2008), unless otherwise stated.

 

The financial results for the Group as a whole for the third quarter continued to be in line with the Board's expectations. Group revenues for the third quarter of the financial year increased by 1% on the same period last year. Group operating margin increased in the quarter, compared to H1 2009, and for the year as a whole each division is expected to be either at or above its respective operating margin as reported for H1 2009. As at 31 December 2008, the Group order book had decreased by 3% compared to 31 December 2007. This was as a result of strong increases in the Mid-market and Business Continuity order books being offset by some continuing weakness in Partner Services. Annualised contract values increased by 3.9% as compared to 31 December 2007. Whilst the macro economic uncertainty has increased the time new customers are taking to reach purchasing decisions, each of the Group's divisions continues to perform well and each has a strong pipeline of new business opportunities.  

 

Given the current environment, and as a result of recent management changes, the Group will incur additional non-recurring costs in order to avail itself of identified cost reduction opportunities. As indicated in the first half period-end trading update, included within non-recurring costs are provisions for impairment losses on freehold properties held for resale. It is highly probable that these properties will remain unsold at 31 March 2009, and therefore their carrying values will be subject to further review. In the current economic environment these valuations may result in significant additional impairment provisions being required.  A detailed update will be provided at the time of the Preliminary Results.   

 

Net debt (including finance leases) of £103.6m at 31 December 2008 was as forecast. The Board reiterates its forecast that net debt will reduce over the fourth quarter of the financial year.  

 

Despite the continuing deterioration in the business environment in the UK, the Group has good forward visibility from its order book and high levels of recurring revenues from a highly diversified customer base, and is well positioned in each of its chosen markets. 

 

Enquiries: 

Phoenix IT
Peter Bertram - Executive Chairman	01604 769000
Nick Robinson - Chief Executive Officer
David Simpson - Chief Financial Officer
Financial Dynamics
Giles Sanderson	020 7831 3113
Haya Chelhot Nicola Biles

 

END

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