In the three months ended September 30, Montreal-based CGI reported unaudited results, showing a 34.2% increase in net profit on continuing operations to CAD 47.7 million ($36.3 million), on revenue that grew 21.4% to CAD 694.2 million ($527.6 million).
The majority of this growth was as a result of acquisitions, however, with organic revenue growth at only 2.5%. CGI said the strong improvement in profitability was largely due to improved profits at its US and European operations, its decision to sell or discontinue certain operations, as well as tight cost controls across the company.
At the same time, CGI said it had acquired a US-based IT consulting and systems integration firm Apex Consulting Group Inc for an undisclosed sum. Boston-based Apex, which employs some 22 people, provides services including order entry and processing optimization, customer relationship management, Microsoft .NET and J2EE development, and IT management support services. The company generates $4 million in revenue and targets the retail, utility and financial services sectors.
During the quarter CGI had also re-evaluated the assets it took on through its CAD 320.6 million ($202.9 million) acquisition of Cognicase Inc in January. This resulted in CGI selling Cognicase assets worth CAD 40 million ($30.6 million) annually to Canadian services provider Nexxlink [NTI.TO] for CAD $21 million ($16 million) in cash and shares in early October. The deal involved 375 CGI employees and more than 500 clients, including 70% of municipalities in Quebec, moving to Nexxlink.
CGI said for the full-year period, it expects revenue and earnings per share growth of between 8% and 17%. The company has now established a revenue run rate of CAD 2.8 billion ($2.07 billion).
This article was based on material originally published by ComputerWire.
