UPDATE: Access Intelligence Sees Limited Hit From Spend Cuts

19th Jul 2010 15:00

(Adds detail, executive comment, share price.) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Software and computer services firm Access Intelligence PLC (ACC.LN) Monday said it is unlikely to avoid the impact of budget cuts entirely, but expects only a limited hit from any squeezed spending by its clients. "There are going to be big cuts and I'm sure we won't avoid them completely but our solutions are relatively low cost," Finance Director Jeremy Hamer told Dow Jones Newswires. The company delivers compliance solutions through its Software-as-a-Service (Saas) product set to regulated industries in the public and private sectors. The Saas model has proved popular during the downturn, as it allows clients to spread the cost of a service over a number of months, rather than having to part with a lump sum of cash in one go. Access Intelligence's customers include the U.K.'s National Health Service, Metropolitan Police and local government authorities. Hamer said the minimum a client could spend on the company's products--which cover e-procurement, training and competence and media relations--is GBP600 a month. "There's no big gain for them to be throwing the software out as all it means is that they'd end up having to employ additional people," he said. "There's some reticence from clients and some are taking longer to sign contracts, but we're not seeing any major drop off in business in the public sector as what we have is a cost-saving product," he said. Nonetheless the company has continued to invest in sealing sales to private sector companies, where compliance with industry regulation is usually mandatory. Access Intelligence acquired training and competency software provider Cobent Ltd. in February, which has opened the business to new regulated markets and international opportunities. Howard Sears, who joined the company following the acquisition of Cobent, told Dow Jones that the firm plans to merge the capabilities of Cobent to Access' MS2M division to provide Saas solutions for the financial services sector. "We've already got a couple of potential new clients and we're keen to put together a complete value proposition," he said. Access Intelligence's first half, ended May 31, pretax profit climbed to GBP470,000 from GBP169,000 a year earlier, on the back of a 63% surge in sales to GBP4.1 million from GBP2.5 million. It made an operating profit of GBP548,000 during the half, nearly equaling the GBP584,000 it made throughout fiscal 2009 as a whole. The firm ended the first half with a much-improved cash balance of GBP2.4 million, compared with GBP714,000 at the same point a year earlier. This is a consequence of the Saas model, which allows for more frequent system upgrades on long-term contracts. At 1331 GMT Access Intelligence shares were trading 1 pence, or 14.7%, higher at 5 pence, outperforming a 0.1% dip in the Dow Jones Smaller Companies index. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires July 19, 2010 10:00 ET (14:00 GMT)