QSP, one of the UK's largest financial software and services vendors, has reported strong interim results as it works to extend its core applications to include horizontal products.
For the six months ended 30 June, QSP saw revenues soar 22 per cent to $22.2 million. Much of this was attributed to significant growth in its services business which now accounts for 15 per cent of total revenues.
Pre-tax profits also jumped 11 per cent to £1.4 million, although tax charges reduced the net to £1.07 million, down 17 per cent on the same period last year. The reduction was due to the company taking a prudent view of its likely end of year position and so made a full year's tax charge of £356,000.
At the same time, QSP announced a one for four rights issue aimed at raising £16 million to fund growth.
Richard Hannam, manager of QSP's corporate affairs said, "All previous tax losses have now been used and we're taking the prudent step of noting a full charge now."
Commenting on the results, financial analyst Richard Holway said, "QSP really should be congratulated, the results are very impressive and the future looks very good."
Over the last two years, QSP has followed a strategy aimed at providing it with repeatable and predictable income rather than relying on license only sales from its financial software. Now, it intends adding to its core applications to provide both horizontal products like travel and expense planning, industry specific products such as air travel card systems tied to billing systems to provide customers with quick wins.
The rights issue, when taken with existing cash and other bank facilities will boost QSP's war chest to around £31 million. It is expected that part of it will be used to reduce long term debt.
QSP has also announced it intends to actively pursue a range of possible acquisitions.
"We'll go for smaller companies that have technology we can integrate very quickly. This is the way to quickly broaden our application depth at the least risk," said Hannam.
Part of that expansion will focus on extending managed services with new specialised products offered within an application service provider (ASP) style framework. However, the company recognises the ASP pricing model has not settled.
David Pinches, group marketing director, said: "We've already won an ASP contract and have a healthy sales pipeline. But we've found that customers do not want to pay on a per transaction basis. They want certainty."
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