Syscap has seen net profits grow 35 per cent in its latest
financial year following a drop in 2007 in the wake of its
management buyout.
Net profits for its financial year ended March 31 2008 totalled
£2.6m, while the value of its assets under management also
increased by 20 per cent during its last financial year, from £295m
to £354m.
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In its 2007 financial year, net profits totalled £1.9m
compared with £2.4m the year before, a drop that Philip White, CEO
of Syscap, has attributed to investment in the company’s structure
and organisation.
White predicted the company’s portfolio will grow by 20 per cent
this year and more if it makes acquisitions.
“We can still grow through acquisitions and we continue to
pursue acquisitions,” said White. “This is an interesting time with
lessors considering their positions in the market and there may be
opportunities that could help us to grow.”
Last month, it announced that it had launched an intellectual
property finance business. The company’s growth plans for 2008
include building its international vendor finance business, which
covers continental Europe, the US as well as Britain.
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By GlobalDataLast year, Syscap became the approved supplier to BarCo, which
supplies services to barristers, and was accredited as product and
services partner with the Institute of Chartered Accountants for
England and Wales.
White said the withdrawal of HBOS and Kaupthing Singer &
Friedlander from UK public sector equipment leasing has opened up
the marketplace to Syscap, as well as other players in this
sector.
However, Syscap faces potential fall-out from setbacks recently
suffered by one of its key clients, Vanco, the world’s largest
virtual network operator, whose shares have been suspended on the
London Stock Exchange. Its shares have plunged by more than 80 per
cent since last August. IBM and Accenture are reportedly interested
in buying Vanco.
White commented that Vanco, while being the source of
single-digit revenue for Syscap, is “one of 4,000 clients we deal
with on an annual basis”.
Revenues at Syscap grew last year by 20 per cent to £162m.
White described the second half of the company’s financial year
as having been “certainly tougher”, despite its growth in new
business. He added that Syscap’s risk exposure is not significant
because it leases to a range of markets, including schools, higher
and further education facilities, the NHS, professions including
lawyers and accountants, and the private sector.
However, he accepted Syscap is not “insulated” against market
pressures and that the next 12 months will be “challenging”. He
noted that the company’s risk criteria are “under constant
assessment” and that a trend has developed recently of some
customers looking to “sweat their assets a bit longer” as a
consequence of the credit crunch, and because they are “getting
wiser about their technology, and aren’t necessarily just being
slaves to Intel or Microsoft”.
Syscap is unlikely to raise extra funds and scale up the
business by way of a flotation, although it has not ruled-out
buying new businesses and portfolios.
