Imaginatik

Although sales fell in the first half at Imaginatik, a software provider that enables large corporations to tap into the ‘collective genius’ of their staff, long-term prospects improved as the company switched its focus from smaller projects to large.

A ‘tougher-than-expected’ first quarter led to sales shrinking 9% to £1.2m for the six months to September, with a £470,000 pre-tax loss dragging cash levels back to £108,000. The dollar effect has not been too deleterious, despite most clients being US-based, as most costs are incurred in that beleaguered currency.

Increased momentum in the second quarter, with new US business wins including Xerox, Kellogg’s and Philip Morris and new pilots in the UK including BSkyB and Merrill Lynch, has continued into the second half, with the company's collaboration with IBM starting to reap rewards.

A previous deal with IBM, whose activities in the area it calls ‘ideation’ are well known in corporate America, was upgraded to a global reselling agreement in August. No impact was reflected in the interim figures, but in October IBM’s sales team was trained up to sell Imaginatik’s solution, which should dramatically increase prospects.

In the second half, four one-off ‘ideation’ projects have already been signed and CEO Mark Turrell is working with IBM to sell more long-term contracts. The London-based company’s efforts to increase recurring revenues saw it sign eight long-term deals in the first half, giving it 40 clients that now pay some form of annual fee.

Together, Imaginatik and IBM have around 70% of a booming market and house broker WH Ireland predicts 70% sales growth this year and next. Volatile since listing at 7.5p in December, Imaginatik has speculative potential with bids a possibility.

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