Phoenix IT expects its Q3 to be in line with expectations despite posting flat sales for the quarter and seeing a three per cent drop in its orders.

The British firm said customers were continuing to be cautious with their spending by procrastinating over orders for some services during the quarter ended 31 December 2008, when it pulled in just one per cent increase in group revenues.

Phoenix said that interest in the mid-market and biz continuity services it provides had grown but was “offset by some weakness in partner services”, compared to same period a year ago.

The company sang from the same hymn sheet it issued in November, insisting each of its units were performing well and that Phoenix has "a strong pipeline of new business opportunities." Annualised contract values were up by 39 per cent compared to the same quarter in 2007.

"Despite the continuing business environment in the UK, the Group has good forward visibility from its order book and high levels of recurring revenues from a highly diversified customer base, and is well positioned in each of its chosen markets," said Phoenix in an interim statement.

For the same quarter a year ago the firm saw a 16 per cent increase in third quarter like-for-like revenues buoyed by brisk sales and brought in a modest one per cent rise in orders compared to the same time in 2006. ®