MCN Direct Newswire

Vol. 4 No. 21, 12 September 2005

This issue is sponsored by:

Maconomy, NCC and The Annual Consultants' Forum

This issue news

1. Capgemini returns to profit
2. Accenture snaps up £235m NHS contract
3. Tony Blair praises Tata
4. LogicaCMG navigates satellite project
5. Axon moves forward in first half
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

Maconomy

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1. CAPGEMINI RETURNS TO PROFIT

Capgemini has moved back into profit after three years of losses, though it still faces an uphill battle to capture new outsourcing business and turn around its US business.

Capgemini made a net profit of €58 million (£39 million) in the first half of 2005, reversing a loss of €157 million in the same period last year. Revenue in the six months rose 21% to €3.5 billion, driven by a 64% gain in outsourcing as the company's Inland Revenue, TXL and Schneider contracts came on stream.

Outsourcing represented 36% of group revenues, but the cost of starting these major contracts pushed the division's operating margin down to -1.8%, with orders also down as no similar-sized contracts were won.

Outsourcing is now Capgemini's largest revenue contributor, leading chief executive Paul Hermelin to say the company will almost double its Indian workforce next year and may consider buying an Indian company to bolster organic growth. Hermelin also warned that Capgemini will have to undertake significant reskilling in Europe if large-scale layoffs are to be avoided. The company has cut over 14,000 jobs over the past three years.

Its consulting business - 14% of group revenue - posted a small drop in revenue compared to last year's first half. Technology services - 34% of revenue - grew 7%, while local and professional services - 16% of revenue - turned in a gain of 9%. The UK and Ireland led the way in terms of geographies, showing a 65% increase in first-half revenue compared to last year's comparable period. In the US, revenues were up 9%, led by the TXU outsourcing contract and local professional services.

Looking forward, Capgemini forecast a full-year operating margin above a previous target of 2.6% and revenue gains of 12% for the year.

2. ACCENTURE SNAPS UP £235m NHS CONTRACT

Accenture has won a £235 million, nine-year National Health Service contract to install a picture archiving and communication system (Pacs) in the North East and East healthcare regions.

Pacs will allow images such as x-rays and scans to be stored and mailed electronically, rather than being printed on film and filed or transferred manually from one hospital department to another.

Ken Lacey, global managing partner of Accenture's health and life sciences practice, explained: "This is an excellent example of how technology is helping to improve patient care by ensuring clinicians across the country have quick and easy access to patient x-rays and digital scans."

Accenture will work with Agfa, the software supplier for Pacs, to deliver the archiving and communication system. It will be part of the NHS' Connecting for Health programme that aims to deliver an improved integrated care records service.

Accenture is also leading consortia in the North East and East regions that are developing patient care systems under the NHS' National Programme for IT.

Sponsor

NCC

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NCC Conference 2005, October 4th & 5th, London.

With delivering value from IT a highly relevant theme, we have negotiated a £50 discount off the non-member rate at the National Computing Centre's 2005 Conference. The full programme, which features the BBC's Declan Curry, also provides ample opportunities to network. To find out more and to book, email Kevin.Brownlow@ncc.co.uk or click here.

3. TONY BLAIR PRAISES TATA

Tata Consultancy Services (TCS), India's largest IT services company, has been awarded the UK Trade and Investment Special Recognition Award by UK Prime Minister Tony Blair.

Blair made the award on a trip to India, saying it was in recognition of TCS' outstanding contribution to the UK's knowledge economy. TCS has operated in the UK since 1975 and has over 5,000 consultants engaged on UK client work, over 2,000 of them located at more than 40 client sites. The company's UK customers include Aviva, British Telecom, British Airways, National Grid, United Utilities, Standard Life and Prudential Group.

Presenting the trade award to CEO and managing director of TCS, S Ramadorai, Blair said: "For 30 years, TCS has been at the forefront of a process of dynamic change in the way business between India and the UK is conducted. Blending the best of British and Indian know-how and technology, TCS has developed innovative, world-beating techniques to develop high-quality services that add value to business plans and efficiency to government service delivery alike. Along the way, TCS has contributed to the economic success of both the UK and India."

Ramadorai responded by saying that TCS had always found the UK "a welcoming place to do business".

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4. LOGICACMG NAVIGATES SATELLITE PROJECT

LogicaCMG has been chosen to develop a prototype service centre for Galileo, Europe's £2 billion civil satellite positioning and navigation programme.

Galileo will support applications such as road pricing, traffic information, local shopping details and child location. It builds on Europe's first experience in satellite navigation, the European Geostationary Navigation Overlay Service (Egnos), which disseminates correction data to improve the accuracy of global positioning services from about 20 metres to better than 5 metres.

LogicaCMG's contract is part of the Galileo reference mission, which sets out the fundamentals of the Galileo system for application developers and receiver manufacturers.

Steve Smart, director of space and satellite communications at LogicaCMG, said: "LogicaCMG is recognised as a world leader in mobile telephony applications, a critical market for Galileo's positioning services. We have supplied similar solutions that have made other programmes operationally successful - the Skynet 5 military communications satellite project is a recent example."

Eric Gellée, director of France Developpement Conseil, which holds the Galileo reference mission contract, said: "The service centre will provide the interface to Galileo users and service providers, in particular in relation to commercial issues. It is a crucial element in ensuring wide commercial uptake of the Galileo services and those of Egnos."

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5. AXON MOVES FORWARD IN FIRST HALF

Business transformation consultancy Axon has reported a strong first half, with its EMEA region performing well and the company's recent US acquisition beginning to make a contribution.

Axon's first-half pre-tax profits rose 30% over last year's comparable period to £3.5 million, on revenue up 51% at £40.4 million. Despite these gains, the gross margin was down from 28% a year ago to 25%, a fall described by Axon as temporary and the result of investment in business development, the impact of wage inflation and the build-up of cost contingency for two major client projects.

Axon chairman and CEO Mark Hunter said: "These results have been driven by the relentless execution of our strategy, namely to become a leader in the delivery of business transformation programmes for large organisations that use SAP as their strategic platform. In the first six months of this year we have grown existing client relationships, won substantial new business, acquired and integrated a leading US consulting company, scaled our offshore development capability and grown headcount by nearly 70%."

Axon's three business transformation service lines all reported increased revenue on last year's comparable period, with business consulting up 53% at £6.6 million, solutions implementation up 50% at £21.9 million and applications management up 53% at £11.9 million.

The company's EMEA business rose 42%, primarily driven by growth in the UK from existing customers and buoyant demand in the public sector, utilities and oil & gas markets. In the US, where Axon bought ex-Xansa SAP practice Feanix in April 2005, the company made operating profits of £200,000 - reversing a previous loss.

Looking forward, Hunter said: "We have a strong order book and a pipeline of major deals that we are seeking to win, while ensuring we have the right operational controls to ensure continued profitable growth."

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