Ah, so that's why Adapt wasn't put in the shop window in 2015
Results didn't show biz in its best light
The reason why Lyceum-backed Adapt remains Lyceum-backed is contained in their latest set of annual profit and loss accounts - company growth stalled and so a sales process was halted.
The London-based outfit was expected to come onto the market last last year and tasked M&A and corporate finance advisor ARMA Partners with managing an auction of sorts. Then things went quiet. No Information Memorandum has yet been sent to prospective buyers.
Every biz owner wants to put their best foot forward when seeking external investment or a buyer, and Adapt had the marks that is still transitioning from a co-location provider to a cloud/managed services outfit in the year ended 30 June 2015.
Turnover for the 12 months fell 13.56 per cent on the prior fiscal to £43.27m. The firm said the drop came after it “gracefully disengaged from some legacy contracts” in data centres services.
Managed cloud services is a target area for Adapt: it launched the Habitat hybrid cloud “platform” launched in mid-2014 and even managed to snare a couple of customers in fiscal ’15, including the Cabinet Office. MCS sales were up six per cent in the year to £20.3m.
Adapt was slurped by private equity firm Lyceum for £30m in 2011, but since then it has itself bought infrastructure outsourcing biz eLINIA (2012) and cloud hosting provider Sleek (2013).
A resulting richer revenue mix showed up in the fiscal ’15 numbers, with gross profit margin edging up to 52 per cent from 44 per cent.
Gross profit was some £400,000 higher than the previous year, taking the haul to £22.6m but this good work was more than unpicked by a ten per cent spike in admin expenses to £28.17m, which left operating losses at £5.56m, versus a loss of £3.48m in the prior year.
Admin expenses included exceptional costs of £3.8m related to exiting some supply contracts, data centre leases and redundancy.
Debts of £33m - two loans - cost Adapt £9.09m to service in the year, which widened pre-tax losses to £13.7m versus £10.02m.
Sources told us they expect the business to come onto the market this year, a little later than initially planned.
Adapt was not available to comment. ®