News

Newbury  – 6^th June 08 - 2e2, a leading provider of mission critical IT Services and Solutions, is today delighted to report its financial results for the year ended 31 December 2007.

 

 

 

 

 

 

 

 

 

 

Terry Burt, 2e2’s Chief Executive commented: “2007 was another strong year for 2e2 with excellent progress being made across the business. Our run-rate business was augmented by strong managed services growth and by some pleasing major

project wins, as 2e2 was recognised time and time again as an innovative and high-quality solutions and services partner. Compel, our latest acquisition, performed well and we are delighted to welcome their customers and staff into the organisation”.

 

 

*Operating profits before depreciation, amortisation of goodwill and exceptional items of £9.8m (2006: £5.4m).

 

Our robust and customer-focused strategy has ensured that we achieve high levels of organic growth whilst also strongly enhancing the size and calibre of our customer base.

 

Against a background of increased competition and tough market conditions, our performance demonstrates the importance of our commitment to innovation and an expanded overall customer offering, as the basis for long-term presence and attractiveness as a quality provider of IT solutions.

 

This is perhaps best confirmed by the acquisition of Compel and its successful integration into the business.  Compel not only provides much-needed capacity in the Enterprise customer arena but adds substantially to our overall scale and to the significant skills and expertise of our workforce.

 

It is by increasing our skills and broadening our offering that we ultimately build our business and this is especially reflected, this year, in the strong growth of managed services. Our capabilities have served us well in dramatically expanding the size and quality of our customer base as the leverage we are able to bring to customer efficiency becomes evident.

 

Our ability to deliver in ways which add real value to our customers is fundamental to our future and I am delighted that we continue to receive not just industry awards and plaudits but repeat mandates as an endorsement of our excellent service.

 

Our capacity continues to grow – whether through dedicated technical skills or geographically – making us increasingly attractive to new customers both for our expertise and for our ability to handle their business in a timely and efficient fashion.

 

Most importantly, whilst undergoing significant growth, we have maintained our high service levels and have retained our all-important differentiator of remaining flexible and innovative. We continue to employ some of the best people in the industry, many with exceptional business and technical skills which allow us to deliver outstanding business advantage for our customers.

 

That all comes with real support – whether from Duke Street Capital or Bank of Scotland – in the financing of our business and its future growth. It equally comes from the very important ingredient in the business mix without which none of this would be possible, our people.

 

As we approach a turnover of £250m our headcount grows, but so too does our talent pool, and I want both to welcome all those who have joined us in the last year and to thank everyone for going ‘the extra mile’ for 2e2 – in so doing you also go that ‘extra mile’ for our customers and that’s what really counts.

 

For further information please visit our website at www.2e2.com or email us at info@2e2.com.

 

 

I am delighted to present our results for the year ended 31 December 2007.

 

The Group achieved revenues of £203m for the year (2006: £143m): an increase of 51%. This strong growth results in part from our acquisition of Compel, which joined the organisation in late March. However, our organic growth also remained strong with revenue growth on a like-for-like basis being an average of over 10% p.a. during the past four years. In a challenging market, we are pleased with this performance.

 

Compel brought some strong skills and specialisations to 2e2. Their Oracle and PeopleSoft practice formed the core of our Business Applications Solutions offer which we have now augmented with a Microsoft Dynamics practice. Compel’s Technology solutions business has enabled 2e2 to expand from the mid-market into the mission-critical enterprise market, increasing significantly the depth of 2e2’s offers.

 

We continue to benefit from good visibility of contracted, recurring revenues which underpin our revenues and are able to identify around 50% of the Group’s annual revenues going forward.

 

EBITDA before exceptional items increased to £20.1m (2006: £13.3m). Operating profit increased to £10.3m (2006: £7.8m). Operating margins before amortisation of goodwill and exceptional items increased to 9.2% (2006: 8.4%) reflecting the ongoing benefits of

the integrated business. Cash balances remained exceptionally strong at the end of the year.

 

 

There was one acquisition in the year, Compel Group plc, which was acquired in March. This business operated in complementary markets to 2e2. The higher-end mission-critical storage and server business forms a natural extension of 2e2’s data management practice and allows us to provide a broader range of services to customers spanning the mid–market to enterprise and encompassing data centre and mission- critical server solutions. Compel’s Oracle and PeopleSoft consultancy practice brought new consultancy skills to 2e2 at a time when we were seeking to enter this space, in order to support the growing demand for managed applications services as part of our managed services offer. We remain pleased with the operation of this business and believe it will form a key part of the offer going forward.

 

All of our businesses traded well during the year with a strong performance all round. It was particularly pleasing to see the fruits of our cross-selling campaign continuing to come through with some strong wins across the business including those between the newly-acquired Compel business and 2e2 Channel Islands.

 

We experienced particularly strong growth within our managed services business, implementing several broad-based solution and support projects for customers. Our Managed Services Centre and Network Operations Centre which we opened last year have proven to be an excellent assets, providing consistently high service levels from a scalable and professionally-managed centre.

 

 

* Non-statutory disclosure, presented for supplementary understanding of the financial statements.