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Cloud transition at ANS Group sees 15% sales slump

ANS Group has seen a year-on-year slump in sales as it transitioned the business from relying on lower margin hardware sales to cloud services.

For the year ending 31 March 2018, sales fell to £53.1m, compared to £62.7m in 2017 – a drop of over 15%. Operating profits also decreased to £7.7m from £8.2m.

ANS added however that gross margins increased by 4.2% against 2017, “benefiting from the investment in higher-margin services”.

It said business in “cloud professional services” was up 120%, and up 23% in “cloud managed services”, but didn't provide any cash figures. The staff count went up to 273 from 260.

“While the deliberate move away from low-margin hardware sales had the expected result of lowering overall revenue, this strategic decision has allowed the company to refocus on cloud-based solutions with a greater value proposition,” maintained ANS. Paul Shannon, CEO at ANS, said: “Moving away from selling hardware was a key milestone in ANS’ journey to becoming a true transformational leader in the UK’s cloud market. This has enabled us to channel all of our focus and expertise into delivering the industry’s most advanced and innovative cloud platforms, helping customers to maximise the potential cloud has to offer.”

He added: “As a result of this strategic decision, we have won several key public and private cloud contracts with AO.com, Sorted.com, Royal London, Euro Car Parts, the University of Leeds, Northumbria NHS and Salix Homes.”

In other results news, Softcat plc has posted an update on trading ahead of its interim results for the six months to 31 January 2019. It said: “Since our last update on 28 November 2018, trading has continued to be strong. As we approach the end of our first half, we are now materially ahead of where we expected to be at this stage of the year.”