Oracle UK tweaks financial reporting, sees revenues rise

Ah, nice move, Big Red – but what's the plan for next year?

Oracle

Oracle's UK tentacle has reported a 103 per cent increase in revenues after making tweaks to its financial reporting – a much needed boost following a slump in the previous year.

The UK arm of the company this week filed its Profit & Loss accounts (PDF) for the year ended 31 May 2018 with Companies House.

The documents showed a turnover of £1.6bn, up from £788.1m. This followed an 8 per cent drop in the previous year, with revenues having been £857m in 2016.

But Oracle – which has reported plateauing global revenues in its more up-to-date, quarterly US filings and is being dogged by claims it is boosting cloud revenues with threats and poor on-premises support – admitted the massive boost in the UK was in fact due to a switch in the way it defines its work.

This is because, on 1 June 2017, the company reorganised distribution activities so it acts as a principal in providing products and services, rather than as an agent. Under IFRS15 (PDF) standards, principals report revenue on a gross basis, while agents record as revenue the net amount they retain as a commission.

Big Red also reported an increase in profits in the full year, due to a decrease in net costs associated with the company pension plan. This saw profit rise 197 per cent, from £11.6m to £34.5m.

An actuarial gain* of £57m was recorded by Oracle on the pension scheme in 2018, which is compared with a whopping loss of £128m in the previous year. The pension plan is due to undergo a full actuarial valuation at 31 May 2019.

The accounts also reveal that Oracle decided to boost its sales and marketing divisions in 2018, having cut staff numbers in those areas between 2016 and 2017. This saw the number of marketeers rise 56 per cent, from 79 on average per month in 2017, to 123 in 2018. There was a smaller increase in sales, from 3,368 to 3,439.

Admin staff fell from 464 to 437 and R&D workers dropped from 711 to 700 – although R&D spending rose to £94.4m, up from £86m in 2017.

Elsewhere, the figures reveal how much Oracle spent on acquisitions for the UK arms of companies it bought out in the 2018 financial year, and on plans announced since then.

During fiscal '18, Oracle's UK arm slurped three companies: Moat Europe for £455,597; Wercker for £84,917; and Zenedge UK for £21,494.

Since then, Oracle entered into an agreement to buy Aconex, which in the UK involves two UK-registered firms: Aconex (UK) Limited at a consideration of £1.06m and Aconex Services Limited, at £7.5m.

Meanwhile, Brit adtech firm Grapeshot – which had a 2016 turnover of £9m but operating losses of almost £2m – was snaffled for £11.1m, and Talari Network’s UK arm, listed at £77,448. ®

* For non-accounting folk, that's the difference between the pension payments actually made by an employer and the amount it expected to fork over. The gain is made by the company, not the employees, natch.

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