LONDON (Alliance News) - Video surveillance and security systems company Digital Barriers PLC on Friday said it has agreed to sell its Services division for a nominal consideration, while trading in the rest of the business has been strong.
Digital Barriers said the Services business has been hit by squeezed UK government budgets and has lagged the rest of the group in terms of sales growth and margins.
It will sell the business to the existing management team at the Services unit for a nominal consideration, with the employees to transfer over to the new business. The company will book a non-cash charge of GBP3.5 million on the disposal.
Digital Barriers said the sale of the Services arm will tighten its focus on higher-margin sales.
Elsewhere, Digital Barriers said its Solutions business has performed very well over the course of the financial year to the end of March. Organic revenue for the division grew around 50% year-on-year in the second half and was 70% higher than in the first half.
This was primarily driven by Brimtek, the US surveillance systems provider Digital Barriers acquired in December.
Revenue for the Solutions arm is set to be in line with the company's expectations, including Brimtek, it said, with adjusted losses to approximately half.
Digital Barriers said it now has more confidence it will deliver a profit for the year to the end of March 2017, driven by the success of the Solutions arm and sale of the struggling Services business, which will have a beneficial impact on margins.
Digital Barriers shares were down 5.9% to 44.70 pence Friday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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