Turnover increased by 21% to GBP158.9m, including a significant contribution (GBP21.6m) from the acquisitions of French Thornton and Easams. With 1999 affected by extra Y2K revenues and a slow take up of the market in 2000, underlying growth, excluding the acquisitions, was at 5%, with lower than anticipated revenues in the project-related applications business.
Operating profit was GBP1.4m (1999: GBP0.8m). This result includes an excellent contribution from the acquisitions – Easams (GBP3.5m) and French Thornton (GBP1.0m). Easams has been effectively integrated into our core business and, through cost cutting and headcount reduction, has resulted in significant increases in efficiency and profitability. The Group operating margin in the core business was lower than in 1999. This was as a result of investments made in sales and marketing activities, and in developing new Application Service Provision and e-business services at a time when the market declined significantly and showed a slow recovery following Y2K. As a consequence of the reduction in the tax charge, improved collection of customer debt, and reduced costs on revenues and benefits contracts in the second half of the year, cashflows in the last quarter were strong, producing a year-end cash balance of GBP15.9m.
