Tech boss Adam Binks said it would have been wrong to have boosted profits at IT managed services and cloud hosting provider SysGroup by taking advantage of the furlough scheme.
The Liverpool-headquartered company signed a lease this week on a new office in Manchester city centre, which is part of Binks’ strategy to disrupt the market.
The company has predicted that revenue for the year to March 31 2021 is likely to be 7 per cent lower than the previous year’s figure of £19.5m, although EBITDA is expected to be up by 3 per cent over the same period.
The fall in turnover has been blamed on the impact of the pandemic but Binks said it would have been ‘wrong morally’ to have exploited the furlough scheme.
Subject to government guidelines the company is planning to return to the office on May 24 having been working from home since March 13, 2020.
Binks said: “When we assessed the situation at the start of the pandemic we were largely underpinned by recurring revenue. Financially we were in a very strong position with a great cash balance.
“If we’d furloughed people I think it would have been wrong morally. We’d have been using an excuse to take advantage of a scheme we didn’t need and we knew there were far more deserving businesses out there for these public funds.
“Neither did we need the Bounce Back of CBILS loans. The only thing we took advantage of was the deferral of our Q1 VAT payment but we’ve since repaid that in full.”
The pandemic prevented workers in SysGroup’s consultancy services division visiting customers but the company chose to reconfigure the business rather than furlough staff.
“We know some of the competition did (furlough staff),” he said. “We like to be different and think outside the box.
“We sat down with our sales and consultancy services teams and we engineered our processes and spoke to our customers to work with them to deliver our services remotely but to the same high level as before.”
The company increased its headcount during the pandemic to 127 and is preparing to open its first Manchester office after signing a lease on a suite on the fifth floor of 55 Spring Gardens, which will become its sales and marketing hub.
The move will see the company create up to 10 new jobs in the first 12 months, with ambitious plans to create a further 20 in the next three years.
Binks said the move reflected the company’s growth ambitions.
“People have known SysGroup and me especially as being Liverpool born and bred,” he said. “We’ve kind of always stayed away from Manchester, with the big competition being over there.
“We needed to shake the market up a little bit. If I look at some of the competitors I can see they’re downsizing offices and encouraging homeworking. I decided to fill the void that exists in Manchester now.”
The company’s revenues have grown by 83 per cent since Binks was appointed CEO in 2018 and he said SysGroup was committed to a buy and build strategy.
“Our plan is still to take the business to a £100m market capitalisation,” he said. “We’re sitting here today at about £23m market cap. That might seem like a million miles away but it only takes two or three strategic acquisitions.
“I do feel as though we’ve had a one year delay because of Covid. We’ve not made any acquisitions in the last 12 months. Now, as we come out of the pandemic, I think we can accelerate that acquisition journey.”
As well as looking forward to returning to the office Binks is also hoping to resume his flying career.
“When I was a kid I always had an ambition to be an airline pilot,” he said. “As I grew up I moved into an IT and it took over my life. I decided to get a private pilot’s licence and I’ve been flying for 11 years now.”CoronavirusCOVID-19