Daisy was able to clear £355m from its debts by demerging Daisy Corporate Services (DCS) in July, freshly filed annual accounts indicate.
Wavenet claims it created the “UK’s largest independent IT managed services provider” when it announced its acquisition of DCS in May.
DCS generated just over half (£223.4m) of Daisy’s total £443.2m revenues in its year to 31 March 2024, the filing reveals.
Having closed the rumoured £1.2bn deal on 11 July, Wavenet will complete its integration of DCS by 31 March 2025, Wavenet CRO Mark Phillips told IT Channel Oxygen last month.
The demerger means Daisy is now once again dedicated entirely to its SME business, which generated the remaining £219.8m of its fiscal 2024 top line.
Daisy Chairman Matthew Riley and other existing Daisy shareholders retained a minority stake in the enlarged Wavenet business. But the DCS transaction also “resulted in a reduction of £230.6m of the group’s senior debt and £124.5m of its PIK debt”, Daisy stated in its accounts.
DCS buffeted by business continuity headwinds
DCS – which provides a full range of managed services and IT solutions to 250-2,000-seat customers – achieved a 7% revenue rise in its valedictory year under the Daisy umbrella, Daisy’s accounts show.
Some £114.1m of the £223.4m total was generated by IT services, with connectivity (£44.5m), cloud (£35.4m) mobility (£23.1m) and voice (£6.3m) generating the remainder.
While DCS benefited from its 2023 acquisition of cyber specialist ECSC and “significant” non-recurring revenue increases, its business continuity business suffered “continued headwinds”, Daisy said.
Lancashire-based Daisy’s SME division saw revenues tick up 5% to £219.8m, meanwhile.
Although group revenue advanced 6%, adjusted EBITDA slipped from £91.5m to £90.4m on the back of lower profits at DCS.
The average spend of DCS’ 1,782 customers in fiscal 2024 was £125,000 (compared with £1,000 for the SME division’s 175,000 customers).
The DCS sale marks the culmination of Daisy’s demerger strategy after it opted to split into four independent businesses in 2019. It sold its Digital Wholesale Solutions partner services arm to Inflexion in 2021, and more recently closed its Allvotec division.
Subsequent to year end, Daisy doubled down on its SME strategy by acquiring 4Com Group.
Daisy said the DCS and 4Com deals will “enhance its position as the largest independent direct SME telecoms business in the UK”.
Daisy had not responded to multiple requests for additional comment at the time of publication.
