Wylie is 'happy' to fund TSG purchases

Nov 20 2008 by Iain Laing, The Journal

THE business founded by Sage co-founder Graham Wylie, which has bought 21 companies in five years, is poised to make further acquisitions.

Newcastle-based Technology Services Group Ltd (TSG), which provides IT support to SMEs through a UK-wide network is in “detailed discussions with two or three” companies, said chief executive David Stonehouse.

And despite the economic downturn the company still expects to make its first profit in its extended financial year, which ends next March, and has plans to float on the stock market.

Stonehouse said: “It’s a good time to look for acquisitions, but you have to be sensible as to what is possible in the current economic climate.

“Our acquisition strategy is to strengthen ourselves in areas were we have not got a presence or credibility. The South West and the Midlands are stronger than the south where there is an enormous market which needs building. The next six months we will complete on another couple of acquisitions.”

He said that company chairman Graham Wylie, one of the region’s richest men, had said he was happy to finance further purchases where appropriate.

The company is still consolidating a number of recent purchases but has taken out £2m worth of costs and has seen like-for-like turnover rise from £31m to £33m in the last year. It has longer term plans to double its revenues to around £70m.

He said that despite Wylie’s backing the company still had plans to float in the longer term. “We are building the business to be attractive to outside investors, including institutional investors. We will look at going on the stock market but clearly not until the environment has improved.”

He said the Gosforth business, which reduced its losses from £4.7m in 2006 to £883,000 last year, was on line to make a profit and that although there would be some restructuring this was not likely to any mean cuts to its nationwide workforce which last year was cut from around 460 to 430.

The company, based on Gosforth Business Park, reduced its debtors levels by more than £2m in a year down to £9.7m in the last financial year.