MCN Direct Newswire

Vol. 4 No. 23, 10 October 2005

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This issue news

1. Accenture beats expectations
2. Capgemini captures £350m Met Police contract
3. Parity plunges into the red
4. BearingPoint helps Egyptian economic reform
5. PwC report highlights race for talent
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. ACCENTURE BEATS EXPECTATIONS

Accenture has exceeded its financial expectations for the fourth quarter of fiscal 2005 and the full year. The Americas drove revenue in the final quarter, but the EMEA region showed the strongest growth throughout the year.

Reporting a record quarter and year, Accenture said its fourth-quarter net profit rose 25% to $229.1 million (£129.4 million), on revenue rising 15% to $3.9 billion.

In the full year to 31 August, Accenture increased net profit by 36% to $940.5 million, on revenue up 14% to $15.6 billion. Its consulting revenue for the year rose 11% to $9.6 billion, while outsourcing gained 18% to reach $6 billion.

Accenture CEO William Green commented: "We're truly pleased by our outstanding performance in the fourth quarter and full year. Our record revenues in fiscal 2005 included our highest annual revenue growth in consulting since we became a public company in 2001. We grew revenues well ahead of the industry average and hit our operating margin target of 13%. We are especially encouraged by our strong fourth-quarter performance."

Fourth-quarter consulting revenues reached $2.4 billion, up 11%, while outsourcing revenues rose 21% to $1.6 billion. All five of the company's operating groups achieved double-digit revenue growth in the quarter.

2. CAPGEMINI CAPTURES £350m MET POLICE CONTRACT

A consortium led by Capgemini has been named preferred bidder by the Metropolitan Police Service for a single-supplier contract to provide information, communication and technology services.

The Capgemini consortium Cubit, including Unisys and BT, will now enter intensive negotiations to finalise the details of the £350 million, seven-year contract. This process is due to be completed in late November, with delivery of services set to start in summer 2006.

Cubit beat metAgility, a consortium led by EDS, to the contract. Incumbent service suppliers, who won initial outsourcing contracts in 1998 and 1999, will ensure continuity of service until the tender process is complete.

Ailsa Beaton, director of information at the Metropolitan Police Service, said: "Through this contract we aim to increase the quality of information, communications and technology services for all staff, set customer-focused services levels and provide greater visibility of the quality of service. Also we want to achieve strategic benefits through streamlining contract management, providing improved management reporting of service and cost data, and benchmarking service costs against market rates."

• While this is a notable win for Capgemini, all is not plain sailing at the company. There are reports suggesting that chief operating officer Pierre Danon, who is leading a turnaround of the company's US business, is hoping to become chairman of another French company. Capgemini has refused to comment, but if Danon does leave, the company will have to take swift action to replace him if it is to continue to rebuild its US business and investor confidence.

3. PARITY PLUNGES INTO THE RED

IT services group Parity has reported a first-half loss as it struggles to dispose of non-core business and create a UK-centred services business.

Reversing a profit of £144,000 in the first half of 2004, Parity reported a net loss of £1.8 million for the six months to 30 June. Revenue in the half rose 7% on last year's comparable period to reach £88.8 million.

Parity said it is focusing on a better and more predictable financial performance in 2006. It has renegotiated its debt financing, sub-leased or re-used empty properties, strengthened its internal cash management and curtailed non-customer capital expenditure.

The company is also in the process of disposing of Parity Americas and its European resourcing solutions business, despite the latter's strong revenue growth of 23% in the first half.

Reviewing the results, Parity executive chairman John Hughes said: "From a revenue standpoint we have assumed no major changes in the outlook for the second half of the year. The group believes that the nature of its customer relationships and the positive comments we continue to receive about the quality of service delivered should sustain the recovering picture of our business in general, albeit with some areas of challenge."

Hughes admitted there is still substantial work to do to restructure Parity and build a competitive, long-term sustainable UK business, but said he was convinced that the strategy is sound and will position the company to be more competitive and to perform financially in 2006.

4. BEARINGPOINT HELPS EGYPTIAN ECONOMIC REFORM

BearingPoint has won a $124.7 million (£71 million), four-year contract from the US Agency for International Development (USAID) to implement a programme of economic, financial and private-sector reform in Egypt.

The consultancy has been providing economic policy development assistance in Egypt for nearly 15 years and will now field a global team in response to Egypt's requests for help in reinstating a private sector-oriented economic model across a range of industries and government-owned or supported institutions. The success of the project will be measured by its ability to increase levels of investment and trade, create jobs and reduce poverty throughout the republic.

James Horner, senior vice president of BearingPoint's emerging markets sector, commented: "We are pleased to have been selected for this project and to have the opportunity to continue such important work with Egypt. Our unique team of professionals has deep expertise in economic governance, taxation, privatisation and financial reform."

BearingPoint is a leading player in the provision of economic governance and private-sector development services to emerging markets. Its emerging markets team has worked in more than 60 countries since it was formed 15 years ago. As well as the work in Egypt, over the past six months the company has been selected for similar contracts in Afghanistan, Cyprus and Montenegro.

5. PwC REPORT HIGHLIGHTS RACE FOR TALENT

Global technology companies are back in the race for top talent and facing intense competition from established companies and new ventures.

According to a study by PricewaterhouseCoopers (PwC), these are the most immediate challenges for technology companies - with the convergence to digital services and economic expansion in China, India and Europe expected to have the biggest impact on business over the next 10 years.

Kenny Fraser, PwC global leader of performance improvement for technology, said: "The technology industry is probably better adapted to change than any other. However, our survey highlights that executives are still facing new challenges - to drive change which responds to customer needs, to build new partnerships and alliances to meet the risks of increasing complexity, and to find the best people to help them."

The PwC study, 'Embracing Change in the Technology Industries', is the first in a series of reports produced with the Economist Intelligence Unit titled 'Technology Executive Connections' and surveyed 126 executives in 34 countries.

The biggest proportion - 48% - cited competition from well-established companies as their greatest challenge, with 42% noting the difficulty of attracting employees and expertise, and 31% fearing new start-ups.

Looking ahead, the study found most executives believe that the events of the next decade that will be regarded as most important in 100 years time are the growth of the internet, the emergence of China and the rise of information-driven consumer power.

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Written by Sarah Underwood. Copyright 2010 PMP (UK) Ltd.