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Access Intelligence
- BY: Andrew Hore |
- POSTED: 06/08/2008 |
- COMMENTS: Add yours
Access Intelligence is selling its non-core assets to concentrate on its core software businesses.
The remaining businesses provide compliance software to the financial services sector and procurement software for the public and private sector. These continuing operations increased their sales from £560,000 to £672,000 in the six months to May 2008. The loss increased from £88,000 to £118,000.
Due North, which supplies the procurement software, was profitable in the first half but compliance software provider MS2M lost money. It is not that much of a surprise that MS2M’s financial services customer base weren’t investing in software. However, compliance software is something that these businesses need so they will have to invest at some stage.
Due North is adding more local authority customers. It is also widening its customer base to include the transport and housing association sectors. It is reviewing its business model. At the moment it receives relatively large upfront payments for licenses.
Annualised recurring revenues from the software businesses are more than £700,000.
Chairman Jeremy Hamer believes that a more focused business will help Access grow through acquisition. He says potential partners were put off in the past by the disparate nature of the operations.
Brendan Austin has stepped down as chief executive and Due North boss Alan Gray is taking over responsibility for all the software businesses.
The non-core businesses provide offsite data storage, email archiving, marketing advice and email marketing services. Most of these operations were the core of the business when it floated in December 2003.
The non-core business increased their sales from £1.18m to £1.27m at the interim stage, but their loss rose from £21,000 to £49,000. That was before a goodwill write-off of £2.7m.
These assets are held in the balance sheet at £1.16m. If this is the realisable value then, with the £557,000 of the cash in the balance sheet, Access should have £1.7m of cash in the balance sheet when a disposal is completed. This will depend on whether there is any cash outflow from the remaining operations. Nearly all the cash outflow in the first half was due to the non-core businesses.
Hamer believes that the businesses can be sold in one go. This would suggest that management or former management may be the most likely acquirers. It may be more complicated selling the businesses separately. Shareholders will need to give their approval to the disposal.
Access shares fell 0.125p to 1.625p, which values the company at £1.78m. That is just above its potential cash pile after the disposal.
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