FY24 Annual Review

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~ 11min read

CEO Review

Tom Ray, CEO at Qodea reflects on a key year in our history.

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Our FY24 performance and the merger – a brief introduction

Three themes dominated our FY24 financial year, which closed at the end of March. The first was a challenging macroeconomic environment, which saw customers more cautious around new projects and slower to make decisions. It was technically the first recession in our history of 30% year-on-year growth and it made planning difficult. The second theme was a shift in resale programmes to prioritise net new business over renewals. The pressure on margins that this created has led us to emphasise high-value sales and services.

Finally, of course, the year saw the completion of the Appsbroker/CTS merger – an exciting moment that sets us up for our next phase of growth. The merged company has an excellent niche as a provider of high quality enterprise-grade solutions powered by Google – and it has a scale that makes it easier for us to develop and create new products and solutions.

Despite FY24’s headwinds, we nonetheless had our strongest ever Q4. The European economy has bounced back surprisingly quickly, which is a very positive sign. And with our push into high-end enterprise solutions now under way, we’re in a good place for a great FY25.

Our new executive management team

Qodea’s senior team blends experienced leaders from CTS and Appsbroker with strong talent from outside.

Bill Bates, former CFO of CTS, will draw on his experience as CFO at Intercity Technology and his senior Finance roles at ATPI and EY, taking on a role that encompasses governance and people as well as finance.

James Dalziel joins as deputy CEO, where he will apply his depth of commercial experience in larger organisations and in growing and scaling businesses.

Luella Martin, our new CMO, comes to us from Civica, where her experience will support our pivot from point solutions to enterprise offers, and help develop the potential in our customer base using account-based marketing.

Hugh Simpson, formerly of EY and Ciklum and experienced in running professional managed services teams, is responsible for delivery.

Why new brand positioning?

Previously, as Appsbroker and CTS, we typically sold technology solutions to CIOs and CTOs. We’ll continue to do that. But we want to appeal to a broader audience – to widen our “aperture of impact” – for example, by working with business stakeholders to help them transform with Gen AI; or to unlock the value from their data. It’s about having a deeper, higher impact with our customers and being clearly seen as a Google transformation partner.

Introduction to our product architecture (our shop window)

We will go to market with three key capabilities, all of which work together to drive business impact for our customers.

Security & Infrastructure. This is “table stakes” – the foundational elements that support all our customers’ digital activities. With our MSSP services, we can provide this offer across clouds, broadening our appeal to any corporate organisation in a way that few vendors can match.

Data Activation. Here, we transform customer data into actionable insights. For example, we’re helping an automotive company to enrich its customer data by connecting it with first-party data, to create “intelligent lead management”, increasing conversion rates. For a water company, our use of data engineering and machine learning is locating unknown points of access to the water system, helping the utility to reduce leaks and revenue losses.

AI, Innovation & Modernisation. This is about helping customers to future-proof their organisations using AI and emerging technologies. It’s all built on data. For example, we’re using data and mapping technology to help a European healthcare business optimise its driver routes to save time, and cut costs and emissions.

How our services have supported customers and markets in FY24

We supported customers across a broad range of areas in the past financial year, from high-impact projects to bread-and-butter activity. Our training activities have included programmes that help our customers to become Google certified, and we continue to support Google Workspace. Around 85 of our customers currently take a flavour of our managed services offer, from application management to managing Google Workspace. Our agile delivery and application development teams have continued to glue everything together. And as Google has brought Chronicle and Mandiant into its fold, our customers can be confident that their high-impact areas have strong security foundations.

"Looking ahead to FY25, I’m confident that with our new team, brand positioning and product architecture, we’re in an excellent place to meet and exceed the demands of our customers, and drive strong growth into the future."

- Tom Ray, CEO at Qodea

Customer Projects

James Dalziel, Deputy Group CEO at Qodea shares more on our achievements and key customer projects.

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Google awards and recognition

We were very proud to win two EMEA Partner of the Year Awards at Google Cloud's Next '24 conference in Las Vegas – for Diversity, Equity and Inclusion (DEI) and Public Sector (Government).

Now that we’re the largest pureplay Google systems integrator in Europe, we’re seen by Google as a “challenger” in the systems integrator ecosystem, smaller than global-scale players but ahead of boutique and reseller firms. This places us in a significant position of advantage.

We’re a popular option with Google because of our loyalty, scale and ability to offer professional services alongside our in-depth market knowledge.

Sectors and geographies

Financial Services. It's an area we have always excelled in, with one of our largest customers being one of the largest retail banks in the UK. The last year of economic challenges have meant that banks too have had to have another look at how to cut costs. We are pleased that we are able to support these large customers with a clear pathway from on-premise and legacy systems, to moving to the cloud and saving money for them and for their end customers.

This year, we have been able to start expanding this experience across more of the UK’s retail banks, which is super exciting. Aside from economic pressures, regulation is always a key challenge in this sector, so we are supporting all of our existing customer base with how to navigate these compliance changes with technical solutions. 

Retail. This is a busy, highly competitive sector. It’s highly price sensitive because of its bricks-and-mortar assets but also very fertile ground for data and AI initiatives as players pivot from physical to online retail. Sustainability is a notable trend in retail where Google services can deliver advantages on top of all typical cloud benefits. As a certified B-Corporation, this is something that resonates with us very much as a business. 

Telco, Media, Entertainment, Gaming and Agencies (TMEGA). The Telco, Media and Entertainment space is really interesting to us as it encompasses multiple different business models.

For example, in the media space, as print media declines, we are helping our customers redefine their business models - not only to cut costs by using AI, but to find new revenue streams that can be supported by using the data that they already have to better effect. In the Telco space, security is the hot topic for us - running multiple hackathons for customers such as Sky, to upskill their employees and ensure that their data and network is safe. Some of our biggest partnerships sit in the agency space, where, with customers like WPP, we are supporting to start them on their GenAI journey, with support from our data and App Dev teams.

Corporate. This sector covers all of the segments but on a smaller scale. Here the challenges are similar, and we are rising to the challenge. For example, our media customers, such as Time Out, The Financial Times and The Economist are all invested in how to utilise the power of GenAI, specifically Gemini, to transform their business models.

We are also supporting utility companies with predictive maintenance to reduce costs and improve service to customers and as the post pandemic travel boom continues, we are supporting a number of travel companies with recovering from a very difficult few years, and redefining how they interact with customers in this new era.

Manufacturing and Industry. This is a strong area of growth for us, where we’ve won large and interesting projects at companies including GSK and Jaguar Land Rover (JLR).

Public Sector. This continues to be an area of strength for us, as we support our large central government departments to navigate the triple headache of a post-covid world, an economic downturn and an impending election. Security and AI are top priorities here, whilst continuing on existing data strategy projects too.

Geographies. We’re focusing on organic growth for the UK, Benelux and DACH markets, and looking to M&A for growth elsewhere in Europe. The arrival of Xavier Colin, who joins us from Google France to lead our Benelux region, also opens up the start of our organic growth march in France.

B Corp and ESG

We take great pride in the B Corp certification that both Appsbroker and CTS earned in 2022 and continue to strive to abide by its values as part of the combined business. Alongside B Corp status, we have a series of internal initiatives in place around DEI and environmental topics. These are part of our culture and our desire to grow in the right way, with a strong sense of social and environmental responsibility. We’re a young organisation with a vibrant, modern, forward-thinking talent base for whom ESG issues are increasingly important. Our focus in this area is not about appearances – it comes from a place of authenticity and is led from the top.

Financial Review

Bill Bates
CFO

Our clear market focus

Qodea has established itself as Europe’s leading Google Cloud Partner. We pride ourselves in our technical excellence in delivering complex digital transformation projects leveraging Google Cloud. Strategically, we want to consolidate our #1 position in this space through a combination of organic and acquisitive growth. Given the size of the total addressable market for cloud services in Europe, and the fact that Google is the fastest growing cloud hyper-scaler and investing billions in its infrastructure and offerings, this presents us with a unique growth opportunity. Google has clear strengths in data tooling, ML and security, where its capabilities are superior to AWS and Microsoft - these are strategically important growth opportunities for us.

Our European reach currently includes a dominant UK presence, customers in Germany and the Nordics, operations in the Netherlands and a near-shore delivery center-of-excellence in Romania.

We will continue to focus on corporate and enterprise-scale accounts, delivering large, complex cloud transformation projects into the businesses. Some of the organisations we currently work with include the Office for National Statistics, NatWest, Santander Bank, HSBC and JaguarLandRover - our client base is unrivaled in the Google Cloud space.

Continued investment

FY24 saw Appsbroker and CTS come together to form the largest dedicated Google Cloud practice in Europe. We spent the second part of the year integrating the businesses to ensure we have the right commercial platform and delivery propositions to launch ourselves into FY25. This was done against a more challenging economic backdrop, but sometimes it pays to invest when others are scaling back. We are already seeing the commercial benefits from this and as our pace of growth builds further, we will continue to invest in attracting, retaining and developing talent, and a push for organic growth in new markets. We’ll invest further in M&A, looking for high-quality targets that are in the right geographies, with the right scale and with enterprise-level customer accounts. Finally, we’ve invested in new office space in London and Swindon, UK. All of this investment is part of a continuing cycle to support our growth ambitions.

Future positive outlook and direction

We’re cautiously optimistic about the coming financial year - we had a record bookings quarter in Q4 and a record delivery order book to carry into the new financial year. The macro-economic climate appears to be easing, albeit there will no doubt be some bumps along the way. That said it does feel like the economy has turned a corner and that is starting to free up budgets for digital transformation again.

"The integration of Appsbroker and CTS means we are a business of substantial scale, with over £160 million in gross revenues. We often get asked if we will become a multi-cloud provider, but we simply believe that we will be most successful as a Google-dedicated cloud services business. We know the Google ecosystem and the technology better than anyone and with a relative scarcity of scaled Google Cloud practices in the market, AppsbrokerCTS is a truly unique business."

- Bill Bates, CFO at Qodea

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