North East ecommerce tech business Visualsoft saw profits fall by 68% in a year in which jobs losses were made as a part of a major restructuring.
The firm, which has bases in Newcastle and Manchester as well as its Stockton-on-Tees head office, has published accounts for the year ending June 2024, which focus on a year of change following a restructure of its technology team. Employee numbers fell from 321 to 290 as a result of the changes, which directors said was made to streamline operations and focus resources on key strategic initiatives.
Bosses said that revenues remained steady, falling from £19.8m to £19.1m ‘despite a tough economic climate and a decline in consumer spending,’ and that its gross profit margin improved slightly, despite a year of supplier price increases and wage inflation. Operating profit fell 68% from £2.2m to £705,000.
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During the final month of the financial year, the company formed a strategic partnership with multinational e-commerce company Shopify, which it said would expand its market, generate increased leads and boost project and recurring revenue. Service offerings were also boosted in the year, with a specific emphasis on design and creative solutions to support client growth.
A report within the accounts by Ashley Wright, chief commercial officer, highlighted six months of significant change to address operational inefficiencies and redefine Visualsoft’s strategic direction.
It said: “As of June 2024, the company has transitioned from a legacy technology provider to a consultative business model aligned with modern eCommerce demands. In June 2024, the decision was made to restructure the technology team which resulted in a reduction in the engineering development team in August 2024.
“Leadership changes were implemented, changes in the executive and operational board, bringing greater stability and strategic direction to this area. Having made substantial progress in transforming its operations and strategy, Visualsoft is well-positioned to capitalise on market opportunities and achieve sustainable growth, ensuring a successful future in the competitive eCommerce landscape.”
Following publication of the accounts, Mr Wright told BusinessLive: “The past year has been one of significant transformation for Visualsoft, as we streamlined operations, refined our strategic focus, and reinforced our position as a consultative eCommerce partner. While our financial results reflect the impact of a tough economic climate - with group revenue at £19.08m, down 4% from 2023, and profit after tax at £670,000 - our gross margin actually improved slightly to 54%, demonstrating our ability to manage costs effectively despite supplier price increases and wage inflation.
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“Since the year-end, we have continued to build on this momentum. Our shift to a consultative model, with a strong focus on Shopify and VSX, has allowed us to generate increased project revenue and recurring revenue streams.
“Customer satisfaction has been a key focus, and our Net Promoter Score (NPS) has risen from -15 in June 2023 to +31 in June 2024, reflecting improved client relationships and service quality.
“Operationally, we have strengthened our resilience, addressing infrastructure vulnerabilities and making strategic investments in predictive tools to better manage churn risk.
“Our time-tracking initiatives and cultural shift towards accountability have also provided clearer insights into profitability and efficiency, setting us up for a stronger financial position in FY25.”