I am pleased to report that 2000/01 was another year of outstanding progress and financial performance for Anite. Notably, basic earnings per share (before amortisation of goodwill and exceptional items) grew by 41% and excluding the IT Personnel business, the operating margin from continuing businesses grew 47% to 13.5% from 9.2% last year.
Over the past three years Anite’s basic earnings per share compound annual growth rate has been 36%. We believe that the Group is well placed to deliver growth into the future with the same strategy and management style that has provided the growth and led to upper quartile margin performance in the FTSE software and computer services sector.
Growth of the business at this pace has required a significant strengthening of the management teams responsible for the strong growth achieved and all our employees have responded to and embraced the challenges that this high growth brings.
Our strategy for growth continues; operating profits have grown from £2.4m to £20.7m in three years. As stated when we released our interim results in January 2001, the Board has decided not to pay dividends this year, but rather to reinvest these funds in our business and core strategy.
During 2000/01 we made a number of acquisitions, which are detailed in the Chief Executive’s review of operations and, after the year end, sold 80.1% of our IT personnel business, our last remaining non-core activity.
I welcome the employees who have joined the Group during the year. We now have more than 1,900 staff; we believe each team member makes a valuable contribution to our success and I thank them all for their hard work, which has helped the Group profits to grow by 51% during the past 12 months. At Group board level we are actively seeking a third non-executive director to join the Board.
We believe the award of options to Anite management and employees has been a major contributor to growth in the past three years. We have granted 21.7m options during this period. In order to provide adequate incentives for achievement of the ambitious Group growth targets in the next three years, proposals to increase option scheme headroom will be made at the AGM on 5 September 2001. In addition, a new Inland Revenue approved option scheme will be proposed.
Overall the Group performed strongly during the year and we are confident of another highly successful 12 months.
Anite, a FTSE 250 and TechMark 100 company, provides a range of services from IT consultancy and software products, to systems integration, solutions delivery and managed services, to four principal markets: telecoms, travel, public sector and finance.
Revenue from our core markets grew by 49% to £162.7m. Our telecoms and travel solutions businesses were particularly impressive. Group profit before goodwill amortisation, exceptional items and tax increased by 51% to £20.7m.
The Group’s 1,000 consultants deliver pan-European IT consultancy services. They provide specialised industry knowledge to the banking, public sector, travel and telecoms markets as well as specialised IT skills in Oracle, SAP, Enterprise Resource Planning (ERP), security, data warehousing and supply-chain management.
In the past three and a half years, we have grown the revenue of our consultancy business from nil to £73.2m, and this year have achieved £8.8m operating profit before tax. We won significant new projects during 2000/01 and expanded our geographic presence. Our consultancy practice covers the main European IT markets of France, Germany, Benelux and the UK.
In July 2000, we extended our coverage of these markets when we acquired Datavance, a Paris-based e-consultancy, for £51.4m. At the time of the acquisition, Datavance was increasing its turnover at more than 50% a year and had much of its activity focused on global blue-chip banking and telecommunications clients. Between completion and the year end, Datavance increased the number of its consultants from 280 to 365, and contributed £16m revenue and £2.2m profit to our operations.
In Germany, our banking practice, which was rebranded from BIV to Anite, continued to perform extremely well. It produced margins of 13% as it continued to provide services to the major German banks.
During a difficult year for GMO, our ERP consultancy practice, we restructured, rebranded it as Anite and made a significant reduction in non-fee earning staff. By refocusing the business and introducing new e-commerce skills we have ensured that it is now in a good position to increase the number of its consultants and improve growth in the year ahead. In February 2001, we agreed the basis on which to increase our holding in the share capital of GMO Management Consultancy (GMO MC) from 75% to 100%. GMO MC provides strategic consultancy services to the German utilities and public sector market and is complementary to our IT consultancy businesses.
In Benelux, Q&R, now re-branded as Anite Benelux, continued to prosper and to maintain its strong relationships with major banks, utilities and public sector clients. The company’s range of consultancy application management and managed services, combined with a particular emphasis on Oracle skills, provides a strong platform for future growth in Holland, Belgium and Luxembourg.
Bert Renes, the entrepreneurial leader and founder of Q&R, sadly became ill during the year, but this has not softened his resolve to help us fully with the continued development of our Benelux operations. We are grateful to Bert and his management team for their fortitude and leadership during this difficult time.
Our public sector business, Anite Public Sector, offers services, which cover social services, revenue, benefits and housing applications, principally in the UK. Major government initiatives for joined-up local and central government and e-government have given us leadership in the local government market. By providing a range of services we increased sales in our government consultancy business to £10m. Anite Public Sector has grown its sales from £ 7m two years ago, to £38m this year and generated operating profits before tax of £2.2m.
We acquired ICL’s local government applications business and the ICL Pericles product for up to £13m, in March 2001, and this establishes a strategic relationship with ICL. Shortly after the year end, we entered into a reseller agreement with the Cedar Group in respect of their financial systems software. Anite Public Sector now dominates this market.
