RebusIS, the IT provider, reported climbing profits despite a dip in revenues.

Profit before tax was £1.8m for the year ended 31 March, up from a loss of £8m the year before.

Revenue in the same period was £44.3m, down from £49.4m, as the company divested itself of two non-core businesses.

New customers signed up over the period included Allianz Cornhill and Beazley. The company also agreed to provide a new web-based claims system for HSBC insurance brokers.

RebusIS chief executive Bob Gogel said the insurance industry was beginning to embrace IT after a lean period for the technology providers.

"The driver is cost ratios. Whether they like it or not, dealing with IT and back-office focus has become an undeniable reality. There's a new confidence among IT managers."

But he predicted consolidation within the IT industry.

"The small firms just can't invest in the training, marketing and geographic coverage to follow their clients."

He said RebusIS' core business grew by 12%, generating a trading profit of £5.1m after a reduction in headcount by about 120 from about 680. About 70% of the growth came from new clients.

Gogel added: "We are two months into the [financial] year and a quarter of the way through our objectives so we're extremely optimistic."