NHS supplier Trustmarque seeks backers after accounting change
Rev recognition blamed for 'funding gap' by private equity backer
The future of major NHS supplier Trustmarque looks less certain after private equity backer Dunedin confirmed that a change in the way revenue is recognised has created a “funding gap”.
The venture capitalist was the vital cog in the £43m management buy-out at York-headquartered Trustmarque, a top table Microsoft partner that counts numerous government healthcare trusts among its customer base.
It was only summer last year that Dunedin replaced Lloyds Development Capital as the incumbent private equity backer, with CEO Scott Haddow and sales director Angelo di Ventura at the helm, so the pace of developments has surprised folk in the channel.
Nicol Fraser, partner at Dunedin, told us: “Since then [June 2013] we have worked hard to support the business”, but added recent developments had changed the complexion of the situation.
“A change in accounting for revenue recognition at Trustmarque led to a material reduction in maintainable earnings. The resulting funding gap could not be bridged. The board of the company is seeking alternative funding options for the business."
In these situations, it is often a race against the clock to secure additional funding, and concerns in the channel are mounting over the business.
In its last accounts filed at Companies House for the year ended August 2012, Trustmarque had a turnover of more than £130m, up 14 per cent on the prior year, and saw operating profit bounce to £4.95m from £4.5m.
Trustmarque employs upwards of 200 people with locations in London, Manchester, Edinburgh and Glasgow. Staff were this morning told of the predicament.
The company was unavailable to discuss the matter at the time of writing. ®