Continues on path to become an ‘as a service’ company
Struggling Pinnacle Technology Group plc has offloaded another business as it seeks to become an “IT as a service” company for SMEs.
The AIM listed provider of converged technology solutions has sold RMS Managed IT Security, a company it acquired in 2011. RMS provides IT security software and consultancy solutions to the mid-market and public sector. Pinnacle sold subsidiary Stripe24 a month ago for £385,000.
“Throughout the group’s period of ownership, RMS’ revenues and margins have steadily declined due to an intensely competitive market landscape for the resale of third party IT security products, as well as RMS’ lack of differentiation within the market,” said Pinnacle.
Furthermore, said Pinnacle, there has been little or no cross-selling of the group’s other products and services to RMS’ customer base, which for the most part falls outside Pinnacle’s target customer base.
In the year to 30 September 2015 the business unit generated an EBITDA loss of £149,000 on revenues of £1.2 million and had net liabilities of £2.2 million.
It was therefore decided that “in order to obtain the best outcome for RMS’ staff and customers”, Pinnacle would seek a trade sale of the business to an “appropriately skilled and resourced purchaser”.
Pinnacle has now entered into an agreement to sell the entire issued share capital of RMS to Intronovo Limited for £1. “Post disposal they will remain a partner who we will use for specialist IT security services and products,” Pinnacle said.
Gavin Lyons, Pinnacle executive chairman, said: “As part of our review of the business, it became apparent early on that RMS would not be core to our strategy going forward. We have, however, been keen to ensure an outcome which is to the benefit of all stakeholders in that business and we believe this sale achieves this.”
He said: “Our strategy remains focussed on creating a strong ‘IT as a service’ business with a simplified organisational structure and I am pleased to be able to share the progress we are making in this respect.”