Detica said that toward the end of the first half of its current fiscal year it saw a sharp decline in demand from investment banks following this summer’s global liquidity crisis. As a result, the company said it expects full-year revenue from its financial services business unit to be somewhat lower than the equivalent figure last year. Detica also said it will transfer staff from its financial services operation and relocate them in its government business.
Financial services revenue totaled 28.7m pounds ($58.9m) in the six months to the end of September, equivalent to 29% of the company’s total sales. The operation has expanded significantly over the last year, following the acquisition of MA International in August 2006. MA specialized in providing consultancy services to the capital markets sector, and its clients included seven of the world’s 10 largest banks.
Detica derives the majority of its revenue from its government segment, and here the prospects are healthier. Just last week, Detica was named as a subcontractor on the UK government’s e-Borders project, which is expected to generate sales of over 50m pounds ($102.7m) for the company over the next four to five financial years.
The cautious outlook for the rest of the year overshadowed what were solid results for Detica in the six months to the end of September. Net profit was up 20.5% to 5.1m pounds ($10.5m) from 4.2m pounds ($8.7m) in the same period of the previous year, on revenue that grew 44.6% to 98.8m pounds ($202.8m). Much of that growth was due to the acquisitions of MA International, Inforenz, and most recently, DFI International. With these purchases stripped out, sales increased by a more modest 8%.
