Scottish tech firm Kick ICT has catalysed its growth strategy following an investment deal that puts the company on track to become one of the UK’s leading MSPs of scale, says CEO Tom O’Hara who’s targeting a £50 million run rate by 2025.
Last month’s investment by LDC into North Lanarkshire-based Kick ICT saw the exit of growth capital investor BGF (which had backed Kick ICT since 2021) and boosts an expansion strategy that first took hold when the company was established in 2015 by O’Hara. “We have grown from £800,000 turnover in 2015 to £29 million today,” he stated. “Our ambition is to achieve a £50 million run rate by 2025 generated through a combination of acquisitions and organic growth. We have a target list and LDC’s investment and support will help us accelerate UK-wide by acquiring complementary businesses in Scotland and the north of England.”
In November 2023 Kick ICT made its ninth acquisition – Dundee-based C2 Software – to expand its Microsoft Dynamics offering. The transaction builds on previous deals including the purchase of Dynamics partner Talon Business Solutions, accountancy software firm Roxxap, Dynamics consultancy Vozero, comms firm Clyde Solutions, tech companies Castle Computer Services, Turnkey Business Software, Turnkey Infrastructure Solutions and Consilium (UK). “These acquisitions alongside strong organic growth have been the key elements in our ability to scale and expand the range of services and levels of expertise that Kick provides,” added O’Hara.
Kick ICT now has five specialist divisions – Technical, Dynamics, Infor, Communications and KickSecure – and together they provide a springboard for the Scottish MSP’s bid to expand UK-wide. “We are a cloud first business with a UK focus on developing, consulting, deploying and supporting business applications and network infrastructure solutions for organisations of all sizes,” explained O’Hara. “Our business applications specialisms are Microsoft Dynamics and Infor SunSystems. Within Technical we are primarily a Microsoft house with a range of complementary enterprise level products like data centre, VMWare and Citrix, while our communications division is at the forefront of UC solutions, providing a digital platform for today’s modern workplace.”
O’Hara claims that Kick ICT’s business model is a differentiator that sets it apart, supported by a well defined and established set of operational KPIs covering sales, consultancy, support and cash, as well as a major focus on driving recurring revenue and margin across all divisions. Today, more than 70 per cent of Kick ICT’s revenue is recurring and the associated margin covers well in excess of 80 per cent of its operating costs. “We are significantly cash positive and our profitability percentage positions us favourably alongside UK peers and competitors,” added O’Hara.
Opportunities
Kick ICT now employs over 170 staff who provide IT managed, communications and digital transformation services to 1,000-plus customers across a range of sectors, with services delivered via Kick’s five divisions. According to O’Hara, these business units are reflective of the key trends and opportunities in today’s market.
“In terms of Dynamics there is a clear shift to SaaS for the provision of ERP, customer applications and power platform digitisation,” he stated. “And as Microsoft continues to invest and grow market share, as a Microsoft Solutions partner we are positioned to help existing customers with their application set roadmap as well as adding new customers.”
We have a target list and LDC’s investment and support will help us accelerate UK-wide by acquiring complementary businesses in Scotland and the north of England
Regarding Infor, O’Hara noted that following the acquisition by Koch Industries there is a sharp focus on cloud products and SaaS. “Our data centre capability for third party add on products for Sun customers positions us well alongside Infor to take advantage of this strategic cloud initiative,” he added.
The rise of remote working and cloud-based collaboration technologies like Microsoft Teams following the pandemic provided a spur for another of Kick’s specialisms – Technical and Comms. “Organisations require a functional, secure and resilient communications backbone as well as increasingly sophisticated cyber protection technologies to keep them safe and operational in the face of a myriad of business damaging threats,” commented O’Hara. “Our skillsets in such technologies enables us to operate as a managed services partner throughout the UK.”
Our ambition is to achieve a £50 million run rate by 2025 generated through acquisitions and organic growth
These strategic threads all weave into Kick’s shared vision and culture of building a sustainable single source UK-wide IT services business of scale, noted O’Hara. “Our foundation is strong, underpinned by our ‘we’re here to help’ philosophy and brand values of Personal, People and Progressive,” he commented. “While Kick ICT acknowledges the digital and technological requirements of modern day businesses, our interactions with people are what matter most to us, along with maintaining the entrepreneurial spirit that epitomises the business.”