Trustmarque: 2014 was a helluva year – for all the wrong reasons

NHS supplier's accounts splattered in red ink

Trustmarque swung to a loss in a challenging 2014 caused by a write-down of acquired Opin Systems, the correction of overstated profits in the prior year and commercial uncertainty leading up to its sale to Liberata.

The licensing specialist turned over £135.4m in the twelve months, £99m of which was based on Microsoft products, versus £151.4m in the previous 16-month financial year.

As The Channel exclusively revealed at the time, the York-based organisation changed its auditor and a review of accounting estimates led to restatements in reported profit.

The shortfall unnerved private equity backer Dunedin, which “lost confidence” in business projections, leading to a refusal to fill the resulting financial hole. Instead it looked for a buyer.

BPO organisation Liberata came to the rescue and subsequently merged its existing software managed services subsidiary Trinity Expert Systems, which it acquired from administrators, into Trustmarque at the start of this year.

“The hiatus caused by the sale process in the summer [of 2014] adversely affected confidence and therefore trading, but we are delighted that the business has retained the confidence of suppliers and customers, with record levels of trading in the first half of 2015,” the CFO’s review in the annual report stated.

The differing period lengths of the fiscals make meaningful comparisons difficult, but despite the issues Trustmarque remained operationally profitable to the tune of £392k in ’14.

But the company took a hit of £1.767m from an “exceptional write-down” in the carrying value of the investment in Scottish tech services outfit Opin Systems, and paid out £363k in restructuring. This left a loss before tax of £1.738m and a net loss of £1.645m.

The prior year's adjustment came in at £1.18m, taking losses for the year since the last audit report at £2.82m. This compares to a profit of £2.383m in the prior 16-month period.

What a year of drama for Trustmarque. It was on the ropes but seems to have come out fighting in 2015. ®