Access Intelligence

Shares in Jeremy Hamer-chaired compliance software and data management provider Access Intelligence have surrendered 27% after the group surprised the market with a slide into losses for the half to May.

On steady sales of £1.7m, last year’s £192,000 profit turned into a £114,000 loss before tax and exceptionals as Access' core data storage business Willow Starcom struggled in a cut-throat market and compliance software arm MS2M faced contract delays.

Chief executive Brendan Austin says to escape the low margins of data storage, the division will instead focus on email archiving. It could prove a prudent move as this is an extremely fast-growing section of the market, forecast by research firm IDC to grow by 34.5% a year to 2009.

Regarding ‘virtual compliance officer’ provider MS2M, Austin assures that although its two biggest clients have not yet invoiced for current projects, ‘they continue to buy products’. To increase sales in this upper end of the market a new ‘head’ is currently being hunted and to tap into the mid-market an online service is being launched in the fourth quarter.

The one bright spot at the interim was public sector compliance software subsidiary Due North, where recurring revenues grew 18%, dragging recurring group sales 10% higher. Due North won a crucial ‘framework’ agreement during the half, allowing access to all public sector bodies in England and Wales without them needing to tender. Previous similar deals have seen it sign up 100% of fire authorities and 80% of police forces, reminds Austin.

With house broker Blue Oar predicting a return to profit at the full year, existing shareholders should hold on and hope. However, as a lot hangs on the success of new initiatives, newcomers should steer clear until they bear fruit.