EXCLUSIVE
By Kristy Dorsey
Expanding technology group Kick ICT has posted a surge in revenues and profits as it continues to actively hunt for further acquisition opportunities.
Accounts due to be filed this week with Companies House show an 86 per cent rise in turnover to £13.2 million during the year to September 2019. Profit before tax more than doubled to a record
£1.6m, smashing through the seven-figure barrier for the first time.
The Glasgow-based group, which provides IT services to small and medium-sized businesses, said the results were driven by organic growth and a first full-year contribution from the acquisition of Castle Computer Services. Kick ICT bought the larger Castle Computer business, based in Belshill, for an undisclosed sum in April 2018.
Headed by Scottish IT veteran Tom O’Hara, the group has integrated its operations under the Kick ICT banner and is now based out of its new 20,000sq ft headquarters in Strathclyde Business Park. The purchase and refurbishment of the building represents a £1m-plus investment, Mr O’Hara said.
“We’re still getting settled in, but it’s great to see it coming together,” he added. “I will have a desk soon, which is nice.”
Mr O’Hara said he was pleased with the Castle Computer deal, which had delivered the “significant” impact on sales and operating performance that was initially envisaged. The group now employs 103 people, with capacity at its new headquarters for up to 200 staff.
“During the year ahead we will be focusing on extending our position in Scotland and throughout the UK,” he said.
“The business has strong cash reserves and fantastic backing from HSBC, meaning we can continue to explore interesting acquisition opportunities with entrepreneurial firms that want to be part of a fast-growing UK IT business headquartered in Scotland.”
Kick IT is currently in discussions about three potential takeover deals, though the most advanced “may not come about”. The other two are in the early stages.
“The plan is that we will do at least one deal in 2020,” Mr O’Hara said. “We are off to a strong start in the current year, with what looks like record revenues for January, so we expect to hit £16m in turnover in the current year without any acquisitions. If we do complete a deal, I would expect that figure to go to £20m.”
Set up in 2015 by Mr O’Hara, Alan Turnbull and David Chazan, Kick ICT claims to be the biggest provider of IT solutions to SMEs in Scotland.
An accountant to trade, Mr O’Hara has an extensive track record in Scotland’s technology sector.
Prior to setting up Kick ICT, he
spent 10 years building up the Scottish arm of Technology Services Group (TSG), the software company established by Sage co-founder Graham Wylie, into a £10m turnover operation.
Kick ICT was established as a vehicle to acquire and develop IT businesses. Its first deal was to take over Talon Business Solutions, followed by the acquisitions of Microsoft Dynamics reseller Roxxap in 2016 and Glenrothes-based Vozero in 2017.
The company made a “significant” investment in 2019 in a new data centre located in Edinburgh’s South Gyle amid growing demand for cloud services to support clients’ key applications.
“That has certainly paid off,” Mr O’Hara said. “The feedback from our customers is that their application sets are now flying.”
Kick ICT further strengthened its management team during 2019 with
the appointment of heads of HR, marketing and IP.
It is currently investing in the creation of a new operational board to be steered by Raymond O’Hare, the former head of Microsoft in Scotland, which will go live from the beginning of April.
“It is a growing up thing, really,” Mr O’Hara said. “Within five years we will have grown to 20 times the size we were when we started out. When you get to that £20m level and beyond, you have to have the structures in place to underpin that kind of operation.”
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