The consultancy and recruitment company Computer People Group Plc of St Martin’s Lane, London has turned in an exceedingly good performance over the year with pre-tax profits up 31% to just over UKP4m on turnover that rose 49% to a little under UKP70m. By following an acquisition policy in the US the group is swinging a greater proportion of its business to the US and away from the UK so that for the 1989 financial year 63% of its business came from the UK and 37% from the US. This compares with a respective business split of 74% and 26% in 1988. Within the UK the group got solid organic growth with revenue from consultancy growing by 27% while revenue from recruitment placements grew by 26%. However, there has been an erosion of sales margins in the consultancy side of the business and the group intends to correct this by focussing on higher margin business. The US side of the business appears to have been an unqualified success over the year with the professional services side of Sterling Software Inc, which was acquired in August 1988, passing the highest profits threshold of the earnout agreement with three months to spare. Similarly, Starlex, acquired last April, is said to have exceeded the Group’s expectations. The Farlow acquisition made in July has not yet contributed to the company’s results. Within the US the group saw turnover rise by 110% and claims that it now has a US operation with national coverage which is of a similar size to the whole of the group in 1985. Thanks to these US acquisitions the group’s ailing International business which supplies consultants from overseas into the US market is now profitable, representing 15% of the total US business. The next year will see Computer People consolidating its position in both the US and the UK markets through organic growth. In the US work will start on the task of knitting all the acquisitions together into one business. The company must also watch its debt as it now has UKP2.4m net borrowings.
