CEO Review

An extraordinary year

I am pleased to present Incremental’s fourth annual review for the financial year ended March 2021. FY21 is a year that will live long in our collective memories. It saw the worst pandemic in over a century, which claimed many lives and changed the way we all live and work. The resulting economic and social disruption has been severe, but this cannot be compared to the pain, sadness and loss of life the Covid-19 pandemic has caused.

FY19 marked the start of the next phase in our growth journey as we welcomed new investors late that year. FY20 was a year of significant change for Incremental, but it was only as we reached the end of the year that we completed our organisational structure and leadership team changes. These changes were necessary to simplify our structure, improve operational performance and increase resilience. FY21 put these changes to the test and I am delighted that they underpinned a robust performance despite the unprecedented circumstances. Last year saw us regain our momentum increasing revenues by almost 25% to £16.2m and increasing EBITDA to £2.5m.

FY21 began with a new organisational structure embedded within the business and the country in lockdown. We took the decision to close our offices and transition to home working in early March before the official lockdown came into effect at the end of that month. Facing the most uncertain economic outlook for a century, our focus was on three strategic priorities:

Our leadership team worked tirelessly throughout the year to ensure we navigated the pandemic successfully and that, even in uncertain times, we kept all our Incrementalists frequently informed about business performance and the decision-making processes.

Our cloud first strategy, which saw us fully transition to the Microsoft cloud in 2016, enabled us to close our offices with no impact on our digital and communication infrastructure. Put simply, committing fully to the Microsoft technology that we deliver for our clients meant that we benefitted from a level of digital resilience that was unimaginable for all but a small number of businesses only a few years ago.

Supporting Highlands and Islands Airports Limited to get up and running at home at the start of the pandemic.

The transition to a cellular business model further matured in FY21 and has proved to be the cornerstone of our ability to respond to the wide range of challenges FY21 provided. The events of last year galvanised the leadership team and the positive impact this had is clearly evident in our performance.

Last year we continued our track record of welcoming new clients at a rate of more than one per week. These new clients range in both scale, geography and market but all have demonstrated a keen understanding of the impact digital technology can have in assuring their long-term success. For us, every new client offers us the chance to demonstrate just how impactful digital technology can be and to grow our reputation and increase client spend. I am particularly pleased to have welcomed a number of enterprise customers from the Financial Services sector.

As we entered into the final quarter of FY21 we completed our third acquisition. Redspire was an independent Microsoft Dynamics partner headquartered in Glasgow, but with clients all over the UK. Their geographic proximity meant that we knew the business well on a personal basis, but it was their technical expertise and deep domain knowledge within the Financial Services sector that were key to our decision to approach and acquire the business. This domain expertise was demonstrated expertly with the development of Virgin Money as a key strategic client in the last 12 months.

Redspire is now operating as an autonomous business unit within the larger group in the same way our existing Power Platform and Azure and Enterprise Resource Planning business units do. Our focus is on ensuring that Redspire continues to deliver for clients, retaining its agility and focus whilst bringing increased scale and technical breadth to the enlarged group.

Redspire has proved to be an excellent fit for Incremental Group and I am delighted that it has continued to grow as part of the enlarged group. Combining Redspire’s financial results on a pro forma basis for FY21, the enlarged group achieved revenues of £19.3m delivering an EBITDA of £3.4m last year.

FY21 has seen Microsoft continue to advance the core technology products and cement its position as a global leader in the Cloud Computing, Office Productivity, Business Applications and Business Intelligence domains. Our strategy is to remain closely aligned to Microsoft and remaining a trusted partner continues to be a key focus for us.

Helping V.Group navigate and make the most of Microsoft.

We continue to be excited by the offerings that Microsoft has in the Data Engineering and Science domain and I believe that growing our capability in that space will significantly increase the value we can bring to our existing and new clients. Growing our capability in this area is a focus for us as we move deeper into FY22.

This last year has seen many of our preconceived notions of the world challenged. For our clients however, FY21 will not be remembered as a year when new business drivers emerged. Rather, it will be remembered as a time when the drivers of digital transformation, flexible working and business agility accelerated even further. We are at a time when everyone finally understands that business is not a competition between big and small, but between fast and slow – post Covid-19 it will only become increasing difficult to survive and thrive if you are slow.

Guiding Home Group, one of the UK's largest providers of housing, on its journey to being more digital.

The services we offer clients are more in demand today than they ever have been. As a result, our ability to execute well has never been more critical and our focus remains on improving the overall quality of delivery. We have created a new Operational Excellence function to support that drive and this, coupled with our continued significant investment in developing all of our Incrementalists, will help us to continue to improve in all aspects of our work.

This last year has been an extraordinary one for us all. At Incremental we have performed exceptionally but we are not resting. Our focus remains on improving, step-by-step, incrementally.

Asking the right questions of our professional services client, Brookson, to deliver real value.