Five ‘thriv­ing’ UK tech firms worth back­ing

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In­vestors must not ig­nore home-grown dig­i­tal com­pa­nies, says James Con­ning­ton

Bri­tain may not yet have a Google, Ama­zon or Face­book, but in­vestors would be wrong to dis­miss do­mes­tic tech­nol­ogy stocks. There are a host of promis­ing smaller firms. Many op­er­ate in niche sec­tors that do not at­tract the same at­ten­tion as the in­ter­net gi­ants, but they still show sig­nif­i­cant po­ten­tial.

Dan Nick­ols, man­ager of the £1.3bn Old Mu­tual UK Smaller Com­pa­nies Fund, said: “We have a thriv­ing tech sec­tor in this coun­try, which those pre­pared to in­vest in smaller firms can cap­i­talise upon.

“Our win­ners are win­ners in niches, rather than global ti­tans, but there are a range of com­pa­nies start­ing to dom­i­nate their sec­tors.”

Here are five Bri­tish tech com­pa­nies that top fund man­agers are back­ing. Mar­ket value £920m; turnover £24.5m; pre-tax loss £9.5m Blue Prism’s share price has soared by more than 1,000pc since it floated in 2016. Mr Nick­ols said it is “ar­guably the global num­ber one at what it does” and “one of the most po­tent ex­am­ples of a busi­ness that can get to a gen­uinely large scale”.

The com­pany makes “soft­ware ro­bots”, which en­able firms to move data be­tween op­er­at­ing sys­tems, re­plac­ing hu­man staff.

“The mar­ket is po­ten­tially very large, and Blue Prism has – quite clev­erly – used the big four global pro­fes­sional ser­vices firms to sell its ser­vices on its be­half,” said Mr Nick­ols.

He added that the busi­ness is still in the phase where it is in­vest­ing for growth, mean­ing it does not yet make a profit, but has the abil­ity to ex­ceed mar­ket fore­casts. Mar­ket value £780m; turnover £87.5m; pre-tax profit £12m GB Group is an “iden­tity data” spe­cial­ist that al­lows busi­nesses to tie on­line clients to their real iden­ti­ties.

“On­line gam­bling com­pa­nies, for in­stance, are highly reg­u­lated and need to en­sure cus­tomers are 18,” ex­plained Mr Nick­ols. He said that GB Group be­lieves it can es­tab­lish the iden­tity of around half the world’s pop­u­la­tion – “a pow­er­ful of­fer­ing”.

“It’s al­ready a global busi­ness, and is grow­ing at 10pc to 20pc a year. It’s not in its in­fancy, but is by no means ma­ture,” he said. “Man­age­ment has demon­strated a range of ways they can add to its ca­pa­bil­i­ties and grow by buy­ing other firms.” Mar­ket value £560m; turnover £133m; pre-tax profit £7.2m Ac­cesso is a soft­ware com­pany that pro­vides dig­i­tal tools for theme parks, mu­se­ums and other at­trac­tions to man­age ride de­mand, cut wait­ing times and boost vis­i­tor spend­ing.

It is a top 10 hold­ing of the Rath­bone UK Op­por­tu­ni­ties fund, run by Alexan­dra Jack­son. “Ac­cesso sells its soft­ware to seven of the 10 top global theme park op­er­a­tors,” she said. “Less time spent queu­ing means cus­tomers dotDig­i­tal pro­duces tools for on­line mar­keters. Its main prod­uct en­ables the au­toma­tion of mar­ket­ing emails, al­low­ing busi­nesses to build and man­age cam­paigns more ef­fi­ciently, in­clud­ing tai­lor­ing emails to the re­cip­i­ents’ pref­er­ences and life­style.

“This is a level of per­son­al­i­sa­tion that con­sumers are com­ing to ex­pect and de­mand,” said Mr Tonge.

He said the firm has in­tel­lec­tual prop­erty in its soft­ware, re­cur­ring rev­enues as it sells its ser­vices for a monthly charge, and a strong dis­tri­bu­tion net­work.

“In late 2017 it ac­quired mes­sag­ing spe­cial­ist Comapi, which is sup­port­ing its push to de­liver its ser­vices via mo­bile, Face­book mes­sen­ger and more,” he added.

‘The firms are not global ti­tans but are start­ing to dom­i­nate their sec­tors’

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