Analysis mason divisional report

Analysys Mason Group was formed in August 2004 out of the merger of the Analysys and Mason groups. The merger produced the only specialist telecoms consultancy in the UK capable of providing both strategy consulting and implementation services. In doing so, the group works with an increasing range of regulators, public sector bodies, policy makers, financial institutions, private sector companies and operators. This breadth of experience gives the group a unique insight into all aspects of telecommunications, both wireless and fixed, and enables it to become an indispensable part of any major telecoms initiative.

OVERVIEW

The integration of the two groups has proceeded smoothly with most of the integration activities being completed in the previous financial year. As a result, the anticipated benefits of the merger began to flow through in the year under review. In particular, economies of scale enabled the group to achieve savings of £0,4 million in the procurement of external services during the year.


Analysys Mason continued to trade under its existing brand names as each of these reflects distinct consulting expertise that is clearly recognised in the markets they serve. That said, management continues to seek and optimise on cross-selling and resource-sharing opportunities across all projects and divisions of the group.

These included a proactive approach to group marketing, the upgrading of critical information systems that support front line consulting and back office administration; and the integration of finance and human resource functions. In addition, management successfully introduced new bonus and incentive schemes during the year; strengthened the management team in key areas; standardised group-wide recruitment and professional development processes to adapt to changing market needs for specialist expertise and marketing skills; and established management succession plans across all businesses.

ANALYSYS MASON DIVISIONAL REPORT

OUR BREADTH OF EXPERIENCE GIVES THE GROUP A UNIQUE INSIGHT INTO ALL ASPECTS OF TELECOMMUNICATIONS, BOTH WIRELESS AND FIXED, AND ENABLES IT TO BECOME AN INDISPENSABLE PART OF ANY MAJOR TELECOMS INITIATIVE.

STRATEGY

Each of Analysys Mason’s trading divisions made significant progress towards achieving their individual strategic objectives:

  • Analysys Research increased key account revenues; coverage of networked media and IT content; and grew US and Asian revenues
  • Analysys Consulting increased US revenues; increased its penetration of emerging markets such as Africa, Asia and South America; consolidated its market leadership in regulatory economics and network cost modelling; expanded its continental European offices; and significantly improved average fees per head, net margins and revenues
  • Mason Communications increased its offshore revenues whilst strengthening its position in the UK public sector; repositioned itself for growth in the enterprise sector; consulted on Europe’s largest outsourcing deal; and supported the world’s largest IT company with Europe’s largest telecommunications project
  • Catalyst returned to profitability and repositioned itself to address strategic client marketing challenges; strengthened its management and internal operations; and invested in marketing to build brand and expertise awareness.

On a group basis, Analysys Mason continued to make market inroads with divisions bidding jointly and successfully on 36 projects worth £3,8 million or more, representing 11% of total revenue.

MARKETS

The principal focus of Analysys Mason’s consulting services is the telecommunications market. Demand for its services was strong during the past financial year, driven by a variety of important long-term trends:

  • The ongoing network technology changes for both fixed and mobile operators and vendors (3G and NGN)
  • The ongoing trend towards digital TV technologies for terrestrial broadcasting as well as CATV and satellite DTH
  • The convergence of media and communications markets, leading to TV service providers selling voice and data services and vice versa
  • The continuing long-term changes arising out of the battle between fixed and mobile operators for voice services, and the move towards “triple play” and “quadruple play” services
  • The changes in demand, technology, and market structure that are placing revenue and margin pressures on operators seeking differentiation and added value
  • The recovery in financial market sentiment that is supporting mergers and acquisitions and a continuing private equity interest in telecoms
  • The growing pace of privatisations and telecommunications market liberalisation in developing economies
  • The ongoing large scale regulatory initiatives in key markets which have yet to be fully worked through
  • The continuing trend for governments to view telecommunications as important for economic growth, to the extent that they are acting to reduce the "digital divide" between rich and poor and between urban and rural areas.

Many of these trends, with the notable exception of the financial market sentiment, are likely to persist for some time. However, the competitive nature of the markets Analysys Mason serves, together with the resulting pressures on margins, are due cause for the future outlook to be a prudent one. Accordingly, the future demand for the group’s services is expected to be broadly similar to the year under review.

FINANCIAL PERFORMANCE

The financial results for the year under review are the first for a full twelve months since the merger of the Analysys and Mason groups. Revenue for the year rose 18% to £33,4 million and EBITDA 86% to £3,5 million. A margin of 10% was achieved. The group continues to look for strategic acquisitions that will enhance shareholder value.

FUTURE PROSPECTS

Analysys Mason has established itself as one of the world’s leading consultancies providing both strategic consulting and implementation services on a global basis. There is much potential for the group to broaden and deepen both its service offering and geographic footprint.
Marketing and recruitment will be focused on enhancing Analysys Mason’s reputation in growth segments such as corporate strategy, and consulting to the Media and Networked IT sectors. Management will continue to look for ways to improve productivity and enhance operational synergies. Most importantly, they will focus sharply on attracting, growing and retaining the best people to maintain the group’s leadership in the markets it serves.