Y2K no disaster for Guardian IT Monday 04 Sep 2000 Operating profit up 44%to #6m, but margins down from 21% to 18% Pre-tax profit before goodwill amortisation up 13% to #4.2m Forward contracted revenue book up 58% to #126m 'Strong' prospects for continued growth A computer systems crash or a disaster that knocks out the network is high on a companys list of nightmares. Thats why Guardian IT, which offers disaster recovery and continuity services to big companies like investment banks, has been doing so well.

Interim results showed yet another good increase in turnover  up 69 per cent to #33m  and operating profit  up 44 per cent to #6m. But operating margins fell from 21.2 per cent to 18 as the group continued its capital investment programme of building new disaster recovery facilities. Growth in pre-tax profit before goodwill was a more modest 13 per cent to #4.2m, held back by a huge jump in the interest bill from #0.5m to #1.8m as borrowings rose to fund acquisitions. The forward contracted revenue book - future revenue already in the bag but which has not yet gone through the P&L account - rose 58 per cent to #125.5m.

Guardian is the UK leader in disaster recovery and is also expanding into Europe  including France, Sweden and Belgium. But Guardian had a setback in its German business and warned that full year sales will be significantly lower than expected as it lost a large IBM mainframe contract to an in-house team.

Guardians breakneck growth over the last four years has been helped by acquisitions, and these results included contributions from deals made last year. Having spent #60m on acquisitions in 1999, Guardians been on the M&A trail again this year. In June it spent #200m on two UK-based disaster recovery groups.

But Guardians ambitions do not stop at disaster recovery. The group is entering the fast growing web hosting market through a new subsidiary iXguardian  targetted at the corporate market. This is a new strategic departure which raises the companys risk profile. But Guardian says web hosting is expected to be about 10 times the size of the disaster recovery market by 2003. Its also setting up new divisions to leverage off the core disaster recovery business. These include iXsecurity to focus on the security aspects of its customers

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-- Martin Thompson (mthom1927@aol.com), September 04, 2000