A COMPANY which bought up two Dorset IT businesses has had dealing in its shares suspended after it failed to file audited accounts by a Stock Exchange deadline.

Despite the hold-up, IDE Group says it has seen “significant but positive” change since revealing the worst half-year results its boss had ever seen.

IDE spent £20million buying the Westbourne-based data hosting and broadband company C4L in 2016, followed by the Poole IT provider 365IT the next year.

In its unaudited accounts, it says it made an adjusted loss of £3.9million from continuing operations in 2018, compared with a profit of £4.1m the previous year. Revenue from continuing operations fell from £53.7m to £41.1m.

Chief executive Ian Smith, who was part of a new leadership team brought in last year, warned last autumn that the strategy being pursued by the previous managers would have taken the firm to insolvency.

He wrote then that “having been a director of numerous companies over the years, I can safely say these are the worst set of results I have ever had to provide commentary for and there is nothing positive to point to”.

The new management split the merged company back into its three original parts: IDE Group Manage ltd (formerly Selection Services), IDE Group Connect Ltd (formerly C4L) and 365 ITMS Ltd.

It sold 365 ITMS for £3m last October to PTCA Newco Ltd, a new company owned by members of the 365 ITMs management team.

The new managers raised £7.55m to provide working capital and boost the balance sheet.

In a statement, chairman Andy Parker said the previous management had “entered into many onerous contracts which created little or no value to the group”.

One contract was costing more than £1m a year and had only generated £50,000 in cost savings. The new leadership had reached a settlement which would save £3m over three years, Mr Parker reported.

His report also revealed that a trademark dispute over its previous company name, CORETX, cost IDE £250,000. The previous leadership had not expected the dispute with IT company Coreix to exceed £10,000, so did not inform its insurer in time to claim under its legal cover.

Mr Parker wrote: “As a result of the actions taken during 2018, we ended the year in a much stronger position than we started it with a strong leadership team, an appropriate cost base and clear focus on operational execution and customer service to drive increased profitability and cash generation.”

Several key customers had renewed their contracts and the company had been “trading profitably” at an adjusted earnings level in the year to date, he said.

He added: “With the upheaval of last year behind us, we are now focused on driving the core activities necessary to support our customers and rebuild value for shareholders.”

In a second statement, Mr Parker said the “significant positive financial and operational change” had led to a delay in publishing full-year audited accounts.

Share dealings in IDE Group Holdings on the London Stock Exchange’s Alternative Investment Market (AIM) have been suspended until the audited accounts and annual report are filed.