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LONDON (Alliance News) - Outsourcery PLC expressed confidence on Wednesday in delivering on market expectations for 2014, as it posted a narrowed pretax loss in 2013, boosted by rising revenues.
The cloud service provider posted a pretax loss of GBP9.3 million, narrowed from a pretax loss of GBP10.0 million in the previous year, as revenue rose to GBP5.2 million from GBP3.6 million in the previous year, and a reduction in finance costs offset listing fees of GBP495,000.
Outsourcery outlined its strategy for 2014, highlighting a focus on activating its existing strategic partners such as with Vodafone Group PLC and Virgin Media, and securing new strategic partners to secure its growth for 2015 and beyond.
It will work on deploying its IL3 cloud platform and achieving accreditation for the project during 2014, and noted that it was already working on the pipeline development for IL3 to maximise its revenue opportunity.
"We're building it, it then needs to through the accreditation process. That doesn't mean we haven't started trying to sell it, we're now already working with our partners on go-to-market," Co-Chief Executive Simon Newton said.
The platform, which is impact level-3 compliant, meaning it is secure for certain restricted data, is being launched with the support of Microsoft Corp. and being developed with Dell Inc. It is primarily focused on the public sector as cloud initiatives come to the fore. "Local government, councils are all under pressure, it's the age of austerity," Newton said.
"There's really only one other player that's providing true cloud services to the government and they don't provide the Microsoft services stack like we do," Newton said.
The company floated on the AIM market in May 2013, and completed its transition away from mobile phone distribution; selling the last of its remaining legacy mobile distribution operations in September.
Co-Chief Executive Piers Linney, who currently sits on the panel of BBC Two's 'Dragons' Den', explained that the onset of the adoption of the cloud can be difficult for former incumbent IT and communications providers, who are held back by their legacy businesses.
"The problem is they really have to cannibalise their business, so legacy in many ways holds back access to the cloud. You see company's like ours that have no legacy, we had the same issue, we had a mobile phone company that was like an anchor, so we sold that off to become a pure play cloud provider," Linney said.
Although the cloud is a quickly escalating market, Linney and Newton expressed confidence of their lead on the competition.
"If you started building Outsourcery today it'd probably take you three years, 30 to 40 million pounds, you'd have to hire a hundred people just to get where we are today, and by then we'd be three years ahead of you again. A lot of it is that we bet the farm three years ago," Linney said.
"The cloud is inevitable, it's a question of, in many ways, how company's access it," Linney said. "The unfortunate thing is that only 10% of the channels [will succeed], you'll see a big shake out in terms of who's going to be the winners and losers."
Presently Outsourcery's expansion plans are focused on the UK, particularly in the public sector, and it does not have any immediate plans to expand outside of the UK.
"A lot of the big companies we work with tend to be multinational, there will be some demand I'm sure for us to expand outside of the UK," Linney said. "We'd probably do that alongside a partner really," Newton said.
Shares in Outsourcery were trading up 0.9% at 110.50 pence Wednesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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