A RESEARCH specialist is set to pass the £1m turnover mark for the first time after picking up new public sector and financial services contracts despite the widespread cuts.
Newcastle-based Explain Research said revenues in the first quarter of the year – which are based on fees – leapt by 44%, largely on the back of contracts with the Yorkshire and Skipton Building Societies.
The independent market research firm, which has around 30 staff, also won work from the North East Strategic Health Authority, even though the NHS is currently slashing its budgets to meet Government cuts.
Managing director David Shiel said: “To be honest, the year has started exceptionally well for us. The first quarter has turned out to be the best ever.
“One or two of the sectors that had been quiet with the banking crisis – financial services – picked up again.
“Even people we thought we’d lose – the NHS, particularly with the changes going on. But the PCTs (Primary Care Trusts) and some of the health authorities are still spending money on things like obesity, alcoholism and teenage pregnancies. We haven’t lost as much as we’d expected.
“July is maintaining a 40% increase and projection for the first half of the year is a rise of just over 40%. The demand for core research is very, very strong.”
Explain now expects turnover to hit £1.1m this year, up from around £830,000. Shiel says the net margin for profitability is around 15%-20%.
The increase in demand for Explain’s traditional services comes before the company starts to reap rewards from its latest social media product, Better Community.
The service, which is aimed at large organisations that need to communicate with their customers, was launched in January after being developed with Stokesley-based social media and branding agency, Better.
Shiel said: “We have no competition at the moment. In 12 months’ time there will be other people.
“It’s a private, online community for very large organisations. A lot of large companies are struggling with social media – they are using the usual, Facebook and Twitter.
“We’ve developed a way of having all that social interchange with their customers. It raises the consumer to the top priority and we manage that engagement.
“We have orders from Northumbrian Water, Scottish Power, CE electric and Home for Better Communities, so that is going to help us deliver consistent growth throughout the full financial year.”
Explain has a further 15 expressions of interest in the system and has set itself a target of converting five of those into orders.
Shiel said: “It’s certainly going to drive the revenue stream. It’s non-traditional and it is something that’s a must for a lot of large organisations.
“We are convinced we are going to get on to a new platform for the business.”
View this article online on NE Business.