IOMART, the Scottish internet specialist, yesterday posted a solid rise in annual pre-tax profits on the back of "substantial" revenue growth from its NetIntelligence product, which blocks viruses and spam and allows employers to monitor e-mail systems.
Glasgow-based Iomart, which employs 510 workers in Scotland and the north-west of England, said pre-tax profit for the six months to the end of September rose 11.7-per cent to GBP1.5m.
However, the company said its profit growth during the period had been restricted by an increase in bad debt provision of GBP930,000, arising from "weak business processes" in Ufindus, its web directory service.
Meanwhile, total sales for the period climbed 26.7-per cent to GBP13.9m.
Nonetheless, the software firm said that sales at its Ufindus and Easyspace businesses contributed as planned, but the new business plan for NetIntelligence has gained "real momentum".
Nick Kuenssberg, the company's chairman, yesterday said the concept of "software as a service" was beginning to take hold, and that the world was now "waking up to the importance of security".
"NetIntelligence is the big story for us, and we believe our time is now coming, " he said.
Angus MacSween, Iomart's chief executive, added: "Following a reorganisation of our sales operation (at NetIntelligence) in the spring and the foundation of our direct telesales team . . . orders have grown quickly."
MacSween also said that he expects NetIntelligence to produce "significant future profits" given its relatively fixed cost base and its "enormous potential" in the US market.
Kuenssberg added: "In the coming months, Iomart will invest further in promoting the growth of NetIntelligence, underpinning Ufindus processes and generating additional Easyspace revenue.
"Since the end of the period, the group has been cash-positive and our expectations are for a good second half of the year with a growing contribution from NetIntelligence and improving cash generation."
Shares in Alternative Investment market-listed Iomart climbed 1p to 81.5p.
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