MCN Direct Newswire

Vol. 4 No. 14, 16 May 2005

This issue is sponsored by:

InterSystems and The UK Consulting Industry Report 2004/5

This issue news

1. Top internet consultancies join forces in UK
2. EDS doubles Indian offshore presence
3. Centrom pursues AIM listing
4. DiData makes headway in first half
5. CSC wins $230m NASA contract
6. Further information - feedback/pass on to a colleague/remove from mailing list

Sponsor

InterSystems

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1. TOP INTERNET CONSULTANCIES JOIN FORCES IN UK

Framfab, one of the few internet consultancies to survive the dotcom bust, has acquired London-based interactive solutions agency Oyster Partners.

Claiming that the acquisition will make Framfab "the undisputed number one full-service digital business in the UK", company CEO Steve Callaghan said: "This acquisition brings together the finest talent in our industry in the London marketplace, with the added benefit that both management teams have known, respected and competed with each other for many years."

The integrated business will be run by a combination of each company's management, with Oyster CEO Luke Taylor becoming managing director with immediate effect.

Taylor commented: "The deal is about growth and the consolidation of our leadership position. We do not plan any headcount reduction across any of our service lines."

Stockholm-listed Framfab will pay £12 million upfront for Oyster - £10 million in cash and £2 million in newly issued Framfab shares. Additional payments will be made if Oyster meets defined performance criteria in 2005 and 2006.

The acquisition will add 130 UK employees to Framfab, giving it 200 staff in the UK and a global total of 460. The deal also adds clients including Abbey, ABN Amro, BT, the NHS and Thomas Cook.

Oyster recorded 2004 revenues of £10.2 million and an operating profit of £1.2 million. At group level, Oyster is expected to increase Framfab's 2005 sales by 35-40%..

2. EDS DOUBLES INDIAN OFFSHORE PRESENCE

EDS is planning to double its headcount in India as it strives to improve its operational performance and return to profitable growth.

EDS is setting up an additional development centre in Chennai with a capacity of 1,500 to 2,000 people. It already has over 1,200 staff working in three facilities in Chennai, and plans to consolidate them with the new employees in two centres to provide an element of business continuity.

EDS also has around 600 staff in Mumbai, from where BPO services are offered, 400 staff in Pune and 200 in a centre in Gurgaon.

Abhay Gupte, managing director of EDS India, said: "We have shortlisted two facilities close to Tidel Park for the new centre and expect the property to be ready by October."

As well as doubling its headcount in Chennai, EDS plans to scale up to around 5,000 employees in India within a year as it builds its BPO and IT and applications development and management businesses.

EDS' decision to expand its offshore presence indicates a growth in demand for outsourced services, as well as the company's intention to press on with the operational improvements that helped it return to profitability in the first quarter of 2005 (MCN Direct 4-12).

Sponsor

The UK Consulting Industry 2004/5

"This is the definitive report on the UK management consultancy industry, making it essential reading for all who need a comprehensive understanding of the subject."
Alan Russell, Director UK Consulting, LogicaCMG.

The UK Consulting Industry 2004/5 report provides over 100 pages of the latest unique data on consulting fee income by sector and service line and other key operational metrics, as well as analysis of the prospects for the most important markets. Published jointly by the Management Consultancies Association and PMP, this report provides an authoritative picture of the world's second largest consulting market.

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3. CENTROM PURSUES AIM LISTING

Surrey-based IT infrastructure solutions and services provider Centrom is seeking a listing on AIM, with a view to raising £2 million to fund organic expansion and acquisitions.

The placing is planned for this month and is expected to value the company at about £8 million.

Set up in 1998, Centrom is based in Nutfield, Surrey and is led by CEO Paul Ryder, an IT industry veteran and formerly CEO of a global health solutions provider. His background is mirrored by the company's target markets, which include healthcare, central and local government, academia and research, and criminal justice, as well as business at large in the private sector.

To date, Centrom has notched up contracts with private sector clients including Marks & Spencer Financial Services, Cedar Group and Dictaphone. In the public sector, it has numerous NHS trusts on its books, as well as a smattering of universities, police forces and criminal justice organisations.

The company claims year-on-year growth since its foundation and is reported to have moved into profitability in 2003.

4. DiDATA MAKES HEADWAY IN FIRST HALF

Dimension Data pushed up its profits and margins in the first half to 31 March, but is struggling to leave behind its tradition as a hardware reseller and build business in the IT services sector.

The Johannesburg-headquartered provider of networking systems, services and consultancy said group revenues rose 15% in the first half to reach $1.2 billion (£695 million). Net profit for the period was $6.3 million, compared to $1.4 million a year ago, while operating profit more than tripled to $24.6 million for a first-half margin of 1.9%, up from 0.7% a year ago.

The gains were made predominantly in the products market, with DiData's solutions revenue rising 44% and total product sales accounting for 62% of group revenue. Revenue from network integration rose 11% - making consulting and systems integration 12% of total revenue - while managed services represented 26% of the total.

DiData CEO Brett Dawson said: "The group has reported good progress in the first half of the year. We have continued to build on the solid performance reported at the end of the last financial period and our profitable growth strategy, including ongoing investment in the development of our solutions lines of business and services offerings, is delivering results."

Dawson said the company expected to continue delivering profitable growth in the second half of the financial year.

5. CSC WINS $230m NASA CONTRACT

CSC has secured a $230 million contract to provide IT services at a shared services centre that will support the US National Aeronautics and Space Administration (NASA).

Construction of the shared services centre at Stennis Space Centre in Mississippi will being next month, with completion due in October 2006. CSC will team up with Lockheed Martin IT on the contract, with the latter providing finance support, some management services and an interim facility at the space centre.

When the five-year contract gets underway - the deal has an additional five one-year options bringing the total value to $230 million - CSC expects 350 of its staff with expertise in SAP finance, federal HR, grant administration and IT to work alongside about 150 NASA employees. The joint team will provide administrative, financial, HR and procurement services to 20,000 NASA employees, applicants, contractors and university partners.

Thomas Anderson, president of CSC's federal sector IT and science solutions division, said: "CSC's experience of implementing and using the shared services model will help us deliver superior results at NASA."

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Written by Sarah Underwood. Copyright 2012 PMP (UK) Ltd.