Technology Services Group Achieves £41.7m Revenue Milestone
Tyneside-based Technology Services Group (TSG) has reported revenues exceeding £41 million in a transformative year following a successful management buyout. The Team Valley software firm, which specializes as a Microsoft Solution Partner for small and medium enterprises, saw turnover rise to £41.7 million for the year ending March 2025.
Financial Performance and Strategic Moves
The company's latest accounts reveal a 4.7% increase in turnover from £39.8 million to £41.7 million, while monthly recurring revenue grew significantly from 65% to 70% of total revenue. This growth occurred despite a 7% decrease in operating profit, which stood at £4.32 million before exceptional administrative costs.
Steven Lynn, TSG's Chief Financial Officer, explained the financial dynamics: "We experienced more elongated sales cycles as customers began extending the life of their existing assets. With political changes including a new government and economic uncertainty, we saw a temporary downturn in one-off consultancy projects."
He emphasized the resilience of their business model: "The fact that we're still growing our managed services revenue demonstrates our business's strength. Our recurring revenue provides protection against economic fluctuations, and we're already seeing demand bounce back this year."
Management Buyout and Leadership Transition
The company underwent a significant management buyout in July 2024 with substantial investment from Pictet Alternative Advisors. This strategic move saw CEO Rory McKeand and his leadership team partner with Pictet to drive the company forward, while founders Sir Graham Wylie and executive chairman David Stonehouse stepped away from the business.
Exceptional administrative expenses for the period totaled £2.533 million, with £2.429 million directly related to transaction completion bonuses from the Pictet acquisition. The company employs approximately 260 staff members across its operations.
Strategic Acquisitions and Integration
During the reporting period, TSG made two strategic acquisitions that expanded its service offerings and market reach. The company acquired Dayta Ltd, which provides accountancy software and financial management solutions to schools and multi-academy trusts throughout the United Kingdom.
Additionally, TSG purchased South West-based Wren Investments Ltd, the parent company of Computer Geeks Ltd. According to company statements, the integration of both Dayta and Computer Geeks is "already well advanced" and represents a significant expansion of TSG's capabilities and client base.
Market Position and Future Outlook
TSG's business model combines recurring revenue streams with one-off consultancy projects, providing stability during economic uncertainty. The company's leadership remains optimistic about future growth prospects as technology investment continues to be a priority for businesses seeking to reduce costs and improve efficiency.
Lynn highlighted the enduring importance of technology investment: "Even with challenging economic conditions, most businesses still turn to technology solutions. They ask how they can invest for the longer term, reduce operational costs, and increase their bottom line—technology remains key to achieving these objectives."
The company's performance demonstrates how strategic acquisitions combined with a management buyout can create growth opportunities even during periods of economic uncertainty, positioning TSG for continued expansion in the competitive technology services sector.
