Light at the end of the tunnel for troubled IDE Group

Revenue declines but losses swing to a profit

Struggling MSP IDE Group has showed signs of improvement in its H1, with earnings swinging from loss to profit.

For the six-month period ending 30 June, IDE saw revenue drop 32.4 per cent year on year to £14.7m.

EBITDA for continuing operations went from a £7.6m loss to profit of £1.2m.

Executive chairman Andy Parker said: "The first six months of the year has been a period of stabilisation following the upheaval of the restructuring which took place during 2018.

"Towards the end of 2018, several of the group's material customers renewed their contracts with IDE, some on a multi-year basis, and I am pleased to say that during the period under review, the group secured several other significant renewals including a three-year contract for cloud and hosting services with a total contract value of over £1m.

"In summary, the first half of the year has shown a significant turnaround from the upheaval of the previous year. We continue to explore further areas where costs can be saved while investing in areas that will help drive growth."

IDE is in the midst of a radical overhaul following a series of bodged acquisitions by its previous management regime.

It purchased 365 ITMS, Selection Services and C4L in quick succession, and has since offloaded 365 ITMS.

Parker has previously claimed that the business would have gone bust if it had continued along its previous path.

IDE said that revenue declined as a result of some projects and contracts coming to an end, as well as a "general level of churn".

The firm's share price fell as much as 28 per cent today.

Kate Hanaghan of TechMarketView said the second half of the year will indicate if the turnaround plan has been successful.

"FY18 was a terrible year for IDE, but with the actions taken - and claims that customer engagement has improved ‘immeasurably' - the new course set looks much healthier," she said.

"We'll be looking for signs it is managing to counter customer churn while increasing the flow of new business through the doors."