CMG Plc, the London-based computer services company, expects customers to keep up their spending in the run-up to Y2K and anticipates another good set of results for the full year. In the meantime, mid-term figures showed net profit up 54% at 23.9m pounds ($38.4m) for the six months through June 30 on revenue up 50% at 290.5m pounds ($466.4m). Earnings per share were up 52% at 18.5 pence.
The company’s shares rose 4.9% to 19.40 pounds ($31) on the news after the market has twitched nervously as directors of one IT company after another have made cautionary comments on the prospects of a slowdown in activity as the end of the year approaches. CMG Chairman Cor Stutterheim says it would be unwise to ignore the potential for isolated incidents distorting planned activities in the last quarter of the year. But he says that discussions with customers do not indicate any general slowdown or freezing of developments.
Stutterheim is even more bullish about next year. We are seeing increasing evidence of strong demand from our customers to address new applications and projects, giving us increasing confidence in our ability to continue to grow ahead of our chosen markets next year and beyond.
CMG is still on the lookout for acquisitions as it spreads it operations in Europe. While it expects to grow faster than the industry average, the one factor concerning the board is that expansion will be held back by a growing skills shortage. This gives it a potent reason to stay on the takeover trail, not just to acquire additional business but also add some valuable staff to its payroll.
