Edinburgh IT consultancy Exception Holdings’ purchase of Dundee mobile app company Waracle was a factor in the parent firm’s pre-tax profit falling 10.5%.
It said the purchase was “extremely significant”, however, and was one of the initiatives that would “bear considerable fruit in the medium to long term.”
Exception bought Waracle for a seven figure sum in January, securing 30 jobs and offering the prospect of another 20 posts over two years.
Exception’s accounts for 2015 show its turnover rose by 1.7% to £20.8 million but profit before tax fell by 10.5% to £1.1m.
Director Scott McGlinchey said: “The reduction in pre-tax profit was due to increased investment in business and service development, the exceptional costs relating to the acquisition of Waracle and relocation of group headquarters.”
He said Exception had been able to make significant and strategic investments in recent years which had underpinned its success.
He said the company’s development plans were carefully designed to ensure continued support for the specific requirements of customers.
The acquisition of a controlling interest in Waracle was “an extremely significant addition to our portfolio of services, adding a very successful mobile apps development capability to our portfolio.”
Exception also invested over £250,000 on its purpose designed headquarters in Edinburgh to support staff and accommodate future growth plans.
The firm was working to achieve ISO 9001 Quality Management System certification and had reconfigured its website.
Mr McGlinchey added: “While we recognise that the recent European referendum result could bring a degree of uncertainty to the UK economy, we are committed to the continued profitable growth of our business, adding yet more customers to our portfolio.
“We see this growth underpinned by increasing demand from both the public and private sectors due to competitive pressures and an agenda for change together with a requirement to embrace the digital agenda and meet even tougher regulatory compliance.”
He said Exception would continue to invest in service delivery capability to ensure it remained at the forefront of the industry.
Speaking at the time of the purchase, Waracle chief executive Chris Martin said: “Exception’s bigger footprint will allow us to expand our services more quickly in growth areas and bring agile thinking to Exception’s existing clients.”
Waracle was formed in Dundee in 2005 and he said its success was due to the talents of its workforce in the city which would continue to be its home.
Based in Bash Street, Waracle planned to expand its workforce in Dundee and at customer sites in Edinburgh and Glasgow to work alongside Exception.
The parent group has more than 250 people working from bases in Edinburgh, Glasgow, Manchester and London.
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