Daisy preps £75m transfer kitty


Daisy Group posted a £17.5 million loss in its preliminary financial results, but still has the riches for aggressive pursuit of market consolidation

Daisy Group’s revenues in the 15 months to March 31, 2010, were £134.4 million, and its adjusted profits (EBITDA) and operating losses were £11 million and £17.5 million, respectively.

The firm bought seven reseller companies in the 15-month period, and a further three since, bringing its total spend to £190.1 million.

Daisy said integration of new assets was going to plan, with businesses purchased to March 31 already running off common platforms, and set to realise synergies of £17 million in the year to March 31, 2011. It has secured a £75 million bank loan facility for further acquisitions going forward.

It said it has shut operations in Halifax and London, to focus on centres at Nelson, in Lancashire, and at Heathrow and Harlow. Its Nelson headquarters has since been expanded to accommodate 300 staff.

Freedom4 Group purchased Daisy Communications for £81 million in July last year. In parallel, it acquired voice and data reseller Vialtus for £42 million and raised a further £83 million by way of a share placing. The new group company was renamed Daisy.

There followed the purchases of AT Communications, Eurotel, Redstone Telecom, Managed Communications and BNS Telecom for a combined fee of £56.6 million.

Since, Daisy has continued to consolidate the fixed line and mobile reseller markets with the purchases of wholesale telecoms and internet service provider Cole Robert for £2.1 million and of airtime distributor Fone Logistics for £3.6 million. It has also disposed of its WiMAX spectrum licences for £12.5 million in cash.

Today, it confirmed as well the purchase of data connectivity and hosted solutions provider MurphX Innovative Solutions for £4.8 million.

It has divided its product portfolio in four: network solutions, data solutions, system services and mobile solutions. It also operates mobile distribution and wholesale channels.

Its intention is to offer a cross-set of communications services to SMEs from a single platform on a single bill.

Its latest performance is split accordingly: profit margin of 42.5 per cent on £62.6 million revenue from network services; profit margin of 48.6 per cent on £24.3 million revenue from data solutions; profit margin of 19.6 per cent on £10.7 million from mobile solutions; profit margin of 54.8 per cent on revenue of £11.5 million.

Wholesale contributed £13.6 million revenue, with a 19.1 per cent gross margin. Mobile distribution contributed £11.6 million, with a 19 per cent margin.

It said it had 65,000 mobile connections at March 31, managed by 250 dealers via Anglia Telecom.

Daisy Group chief executive Matthew Riley (pictured) said: “These results demonstrate the progress we have made towards our aim of becoming one of the largest UK providers of unified communications services and solutions to the SME and mid-market sector.

“We have integrated acquired businesses on schedule, providing significant cost savings which will be reflected in our results for the year to 31 March 2011. We have in place the platform, the systems, the people and the product set to allow us to continue to grow organically and by further acquisitions.

“The recently completed bank funding provides the Group with the capability to pursue future acquisitions and we look forward to the coming financial year with confidence.”