Digital Barriers shedding Services division

1st Apr 2016 11:40

(ShareCast News) - Digital Barriers was set to shed its loss-making Services business on Thursday, announcing it was divesting it to management.The AIM-traded company's board had indicated on 11 December last year that it no longer believed the Services division was strategic to the group's future.On Thursday, it confirmed it had now signed an agreement for the proposed disposal to its existing management team for a nominal consideration. It was expected to complete within six weeks.Digital Barriers said the division would be treated as a discontinued business in is full-year results for the 12 months to 31 March.The board said performance in the Services division was anticipated to be weighted towards the second half after a disappointing first six months, and because of continued budget pressures across is UK Government customer base.However, it had not recovered as much as initially expected, and Digital Barriers now anticipated sales for the year to total £4m, compared with £7.5m in 2015."Our strategy since inception has been to establish a high-momentum technology business capable of delivering continued growth by selling proprietary, IP-rich solutions to flagship customers around the world," said Digital Barriers CEO Zak Doffman."This has been an important year for us in delivering against our strategy and the strong growth and continued momentum of our Solutions division has seen us reach an inflexion point - both in terms of our growth and in our relevance to customers," he added.Doffman said the Services division helped the company to establish its technology credentials across major government agencies in its early years, but could no longer be seen as strategic."The proposed and advanced divestment of this division, combined with the acquisition of Brimtek, means that we enter the new financial year in better shape than ever before, with our sights set firmly on delivering the growth needed to deliver profitability in the year now underway."Digital Barriers' continuing business comprised its Solutions division and US surveillance technology company Brimtek, acquired on 2 March.The board said year-on-year organic growth within Solutions was around 50%. Revenue for the division, including Brimtek, was expected to be in line with the board's expectations, with adjusted losses reducing around 50% year-on-year.