SSP to grow revenue through acquisitions

SSP chief executive Laurence Walker (pictured) told Insurance Times that he expects the technology specialist to return to revenue growth after several years of flat revenues.

Speaking after releasing the Group’s financial results for the 12 months to the end of March 2013, Walker said an increase in spending by insurance companies would help boost SSP’s revenues over the coming months.

Walker said: “Our revenues have been pretty flat for the last four or five years and that’s a reflection of us being reliant on the insurance market.

“However, we are starting to see a recovery in terms of insurance organisations spending money to operate in this new financial climate. We are starting to see [business] pick up.”

And SSP chief financial officer Carol Thompson said the company had already seen signs that revenue streams were entering a period of growth.

Thompson said: “Over quarter one we’ve had one of our strongest out-performances on the [previous] first quarter for a long time. And [we’ve had] some significant wins, certainly from insurers, so we’ve got some great results coming through from that.”

She added that the increase of SSP’s recurring revenue to £56m from £54.8m in 2012 was indicative of the increased spending in the market.

Growth aspirations

Walker has set an aspirational target for SSP to achieve revenues above £75m and profits of approximately £20m over the next 12 months. This compares to revenues of £70.7m for 2013, of which about £20m was from the insurer division and £50m from broker business.

SSP also reported earnings before interest, tax, depreciation and amortisation (EBITDA) of £18.2m for the last financial year.

Walker said that acquisitions could help drive SSP’s future revenue growth after a period when acquiring businesses did not make good business sense. He added that overseas markets, which currently account for 25% of SSP’s business, were included in this acquisitive strategy.

“We’ve had five years of rationalisation and maturing our business. There haven’t been many good assets to acquire and people can’t achieve the value aspirations that they have for their businesses in a fairly poor economic environment,” Walker said.

“Having said that, the debt markets are opening up and there are some quality assets coming to market that we would look at both in the UK and internationally to complete our portfolio. What we would look to do is acquire products and services that would augment [our product portfolio] in overseas territories or deliver innovation in the UK.”