MCN Direct Newswire

Vol. 5 No. 6, 27 February 2006

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This issue news

1. Capgemini back in the black
2. Steria scoops £30m government project
3. Capita off to flying start
4. Nolan Norton set free by Atos Origin
5. ABeam lights on Europe
6. Further information - feedback/pass on to a colleague/remove from mailing list

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1. CAPGEMINI BACK IN THE BLACK

Capgemini has returned to profit after three years of losses and is forecasting better things to come next financial year.

The consultancy made a net profit of €141 million (£96 million) in 2005, reversing a loss of €534 million the previous year, on revenue rising 11.5% to €7 billion. Its operating margin moved from minus 0.4% to plus 3.2%, ahead of analysts' expectations of 3%.

Capgemini attributed its return from the red to "excellent performance" in its local professional services business - which showed an 8% revenue gain on 2004 - a rise of 9% in European consulting and technology services, and a positive operating margin across its US business.

Outsourcing revenue rose 33% to €2.6 billion, boosted by mega deals with HM Revenue and Customs, TXU and Schneider Electric.

Looking forward, Capgemini expects to deliver 2006 revenue growth in line with the market and a significantly higher operating margin than in 2005. This will be done by consolidating its leadership position in Europe, consolidating profitability in North America and implementing an initiative aimed at improving profitability in outsourcing.

2. STERIA SCOOPS £30m GOVERNMENT PROJECT

European IT services provider Steria has beaten competitors including Unisys and Fujitsu Services to a £30 million contract at the Office of the Deputy Prime Minister (ODPM).

Under the terms of the five-year deal, Steria will become the ODPM's strategic IT partner, providing managed technology services to 3,000 UK staff and developing an infrastructure to support future business improvements within the department. Steria has taken on Capgemini as a subcontractor to provide change management consultancy around the IT-enabled transformation and new business applications.

Steria UK chief executive John Torrie said: "We are delighted to have the opportunity to work with the ODPM to realise its aim of becoming a more agile, integrated organisation. We will bring to bear our experience in helping other government organisations realise efficiency and effectiveness gains by underpinning innovation and change with robust IT services and infrastructure."

The project is due to deliver two initiatives this year: a Microsoft Exchange-based infrastructure for use by all ODPM employees; and an electronic document and records management system pilot that will initially be available to 300 users in the ODPM's information management directorate.

Steria's experience in the UK public sector includes projects for police forces, the Ministry of Defence and the British Home Office. The ODPM contract follows a UK marketing push by Steria, which closed 2005 with revenues up 19.5% at €1.2 billion (£816 million).

• Siemens Business Services has secured a £6.7 million, three-year deal with the UK Immigration and Nationality Directorate to manage the payment process for work permits and leave-to-remain applications.

3. CAPITA OFF TO FLYING START

Capita has careered into 2006, signing £360 million worth of new contracts and extensions inside the first eight weeks.

As well as major deals with the BBC and Department of Trade and Industry (MCN Direct 5-5), Capita has extended its business with consumer electronics group DSG International through a £120 million, seven-year agreement. It also confirmed that it has no material contracts - those having annual revenue of more than 1% of 2005 turnover - due for renewal this year.

The strong start to 2006 follows a year in which Capita reported a 19% gain in pre-tax profit to £177.2 million, on turnover rising 12% to £1.4 billion. Its operating margin increased from 12.5% in 2004 to 13.3% in 2005.

Commenting on the results, executive chairman Rod Aldridge said: "Our successes during 2005 have positioned us strongly for 2006. Our operations are performing consistently well, our chosen markets are active and our sales prospects are exciting."

Pursuing its strategy of acquiring small, realistically priced businesses that complement or develop its service offerings, Capita invested £88 million in 11 acquisitions in 2005 and expects to make a similar volume of small transactions this year.

Capita also invested further in its offshore BPO capabilities in 2005, establishing a second business centre in Mumbai of 50,000 sq ft, with a further 50,000 sq ft under option. The company's total potential space in India is now 120,000 sq ft, with a seat capacity of over 1,250, although it currently employs just 400 staff in Mumbai, servicing five clients.

Some 2,000 employees joined Capita through 2005, raising its headcount to 25,000 across the UK, Ireland and India.

4. NOLAN NORTON SET FREE BY ATOS ORIGIN

Strategy consultancy Nolan Norton & Co has reached a management buyout agreement with its parent Atos Origin.

The strategy house, founded in the Netherlands in 1988 by American academics Richard Nolan and David Norton, was acquired by Atos Origin as part of the KPMG Consulting purchase in 2002.

Distinct from the business consultancy services provided by KPMG Consulting (now Atos Consulting), Nolan Norton is seeking independence to safeguard its role as a strategy consultancy, although it will continue to work closely with Atos Origin.

Ger Damen, managing partner of Nolan Norton, will lead the 70-strong company. He commented: "Over the past three years, Atos Origin gave us every opportunity to serve top 500 customers. At the same time, Nolan Norton has always wanted to be able to provide advisory services completely independently. The management buyout gives us clear-cut independence and unrestricted access to potential customers. We are expecting to be able to grow more rapidly as an independent strategy agency, both in the Netherlands and internationally."

5. ABEAM LIGHTS ON EUROPE

ABeam, a Tokyo-based consultancy with a delivery network covering Asia and North America, has moved into Europe - reversing the trend of western firms moving east.

Abeam has initially set up in Amsterdam and will begin to offer consultancy services within Europe - mainly to the automotive sector in Frankfurt and enterprise clients in Brussels - from next month. It will start with about 25 staff, led by former management consultancy executives Doug Downing and Erik van Haaren, before entering other European markets such as the UK and Switzerland.

It is targeting Japanese and Asian businesses that are already active in Europe, European multinationals planning to enter Asian markets, and local enterprises. It aims to have 200 consultants and an annual turnover of €25 million (£17 million) in Europe in three years' time.

Abeam was set up in 1981 and has about 2,000 consultants in Asia and North America. It offers strategy consultancy, business process re-engineering, IT implementation and outsourcing services to the manufacturing & distribution, telecoms & media, financial services and public sectors.

The company's name stands for Asian Beam, reflecting its intent to "shine forth from Asia as the region's first truly global consulting firm".

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