Imaginatik

Problem-solving software provider Imaginatik (IMTK) is riding out troubled times by trumpeting its ability to help companies cut costs.

In the year to March, the Winchester-based company delivered a maiden operating profit, before share option charges, of £129,000 on turnover increased 45% to £4.6m. However, Imaginatik posted losses of £102,000 at the pre-tax line, though it closed the year with £1.1m of cash in the bank and no debts.

Founder-CEO Mark Turrell is particularly enthused by the growing levels of recurring revenues in the company, with 11 new clients signing up to three-to-five year contracts last year to take the total up to 40. These sales made up £3.3m of the group total and, he says, ‘mean we are very well insulated from the market’.

Equally important, he says, is the change in emphasis of the group's marketing message towards cost reduction. ‘Innovation has dropped off a cliff,’ argues Turrell, ‘while cost reduction and process improvement have moved to the forefront.’

For example, IMTK’s collaboration-management software, which helps companies extract and collate ideas from their staff and customers, threw up an idea to enable outsourcing customer CSC to save $1m per day in its finance department, while retailing behemoth Wal-Mart now saves a reported $38m of electricity consumption costs, principally from an employee’s idea to incorporate smaller doors into warehouses.

Turrell believes there is plenty of growth to go for and says sales and marketing spending is to be doubled this year, with plans to increase business with existing clients and to re-double ‘alliances’ with IBM and the aforementioned CSC. Forrester Research expects its addressable market to expand 40-fold to $1bn in the medium term, with house broker Arbuthnot predicting pre-tax break-even on £5.9m of sales for 2010.

Though its shares have left December’s all-time low of 1.88p behind, Imaginatik remains a speculation.