It has been a year of restructuring and reorganising for Computer People Group Plc. The London-based computer recruitment, consultancy and training group saw operating profits increase by 153% to ú4.0m, but after exceptional charges pre-tax losses for the year to December were ú391,000. However, one analyst was predicting pre-tax profits for 1995 of ú7.4m late last year. The company acquired VNG Group Ltd in October for ú7m (CI No 2,515), and it contributed ú4m in two months of turnover. Span Consultancy Ltd was purchased last July for ú5.5m (CI No 2,446), and its revenues for the five months were ú11.5m. Turnover for the group as a whole rose by 42% to ú97.7m. The company incurred costs of ú1.2m for integrating the two acquisitions – although they still operate under their original names – but chief executive Tony Reeves envisages savings this year outstripping that figure. The largest exceptional charge however, was the ú2.9m related to the revaluation of the company’s property in London’s Docklands, which is something Reeves felt was necessary given the extremely depressed state of the property market in the area. The UK business achieved a 50% rise in turnover to ú66.3m through a combination of organic growth of 15% and the acquisitions. The recruitment business continued its recovery, turning in revenues up 60% to ú2.8m. Operating profits in the UK more than doubled to ú3.4m. The US business revenues rose by 19% to the equivalent of ú28.9m, due to an rise in the number of consultants and their rates, but fell as a proportion of the total, down 5% to 30%. Operating profits in the US stood at ú1.5m, a rise of 140%, reflecting better market conditions and tight cost control, according to the company. The group’s Interskill SA subsidiary, which was part of the VNG Group, is performing in line with expectations, having contributed ú2.5m in two months’ turnover, and will serve as a springboard into Europe, though initially through organic growth alone. The US business recently announced the acquistion of Automated Concepts Inc of Los Angeles for up to $2m (CI No 2,618), and this should be completed by the end of March. A total of ú18.3m was raised in sales of new shares for acquisitions, expenses and to reduce the new companies’ debt. The company plans to reduce its gearing from its current level of 89% to around 30% to 40%, as this year will see lower tax payments of around ú1m and very little outflow, according to finance director Richard Pinder. A final dividend dividend of 2p is being recommended, making a total of 3p, against the 1.5p last year, when only a final dividend was paid. Reeves predicts a better return in 1995 after a good start to the year. The group had net borrowings of ú6.7m at year-end, and further acquisitions in the UK and Europe are unlikely, organic growth being the order of the day. But if a company like Span came along in the US, Reeves said it would be very attractive to us.
