In the midst of market gloom and cutbacks, e-procurement specialist Proactis is seeing greater demand for its products.

In this age of austerity, cash is king and cost is at the forefront of the corporate agenda. This era of prudence, pervading the private as well as public sectors, is playing into the hands of spending control and e-procurement solutions specialist Proactis.

With economic recovery still fragile at best and the UK public purse in a parlous state, belt tightening is the buzzword across the commercial (private), public and not-for-profit sectors, all target markets for Wetherby-based Proactis.

AIM listed since 2006, the company is now seeing high levels of demand for its core product, Proactis Spend Control & eProcurement, sold directly in the UK and US and via select partners elsewhere internationally (Europe, Asia-Pacific, Middle East).

The product enables organisations to streamline and control and monitor all internal and external spending – other than payroll – in areas ranging from stationery and computers to suppliers. It helps clients cut unnecessary costs, improves spending with suppliers and provides superior spending visibility and transparency for management.

In these straitened times, Proactis is seeing high levels of demand for its technology and 300-plus UK organisations now use its product across the financial services, media, retail and oil and gas sectors, as well as the public sector domains of higher education and local government. Giving but a flavour, users include law firm Eversheds, the London Borough of Newham, Virgin Active and, in the not-for-profit space, Amnesty International and the NSPCC.

Under Rod Jones, its straight-talking chief executive, Proactis recently posted impressive annual numbers to July. Adjusted pre-tax profits were up 12 per cent at £1.1 million, on sales increased 7 per cent to a record £7 million.

As well as top line progression, the numbers reaped the benefits of a restructuring bout carried out in the previous year’s third quarter, involving cost cutting and the integration of previous acquisitions. ‘We did some M&A a few years ago and our cost base was heavy,’ recalls Jones, ‘but last year, we operated as a single organisation with a single product set.’

Operational cash generation improved significantly, from £700,000 to £1.6 million, leaving a net £2.4 million (2008: £1.2 million) in the coffers at the year-end.

Annual highlights included the signing of 44 new deals, close to one new win a week, as well as 52 product upgrade deals signed with existing clients. In the public sector, where pressure to reign in spend began to mount, 15 new clients were won, driving the total number of accounts to 105.

In the cost-conscious not-for-profit and charities sector, which relies on hard-fought-for grants and donations, the total number of clients rose from 34 to 43 over the year. Meanwhile, a further 20 new accounts were won in the commercial sector, where financial and professional services and oil and gas are areas of strength, taking the client total to 109 (2008: 89).

In addition, Jones was keen to highlight significant growth in recurring support revenues, from £2.6 million to £3.1 million, as well as strong sales growth from the US and growth in new licence revenues secured elsewhere overseas. During the year, growth prospects were boosted by an independent industry report from IT analyst body Gartner, labelling the Proactis product as ‘best-in-class’.