UK-based IT services company Parity Group Plc has announced first half net income up 16.8% at 6.8m pounds ($11m) on revenue that rose 14% to 153.6m pounds ($246.5m). At the pre-tax level, profit was up 17% at 10.24m pounds ($16.44m). Earnings per share also rose 18%, to 4.71p ($7.56).
Despite the healthy growth figures, Parity announced yesterday that CEO Paul Davies was resigning. A spokesperson for the company attributed Davies’ exit to the alterations in group structure carried out in July, when Parity sought to accelerate its international expansion by creating the post of managing director for each of its country operations, with each MD answering to the CEO. In the new structure, the CEO becomes less hands-on and more of an overseer, which is a role that wouldn’t suit Paul, the spokesperson commented.
Indeed, the group’s international expansion is already visible in the latest results, its UK revenue representing 62% of the total. This includes both the revenue from its consultancy and training business in the UK (27.1m pounds, or $43.5m) and from Parity’s staffing agency, which carried out recruitment and bodyshopping activities (69.3m pounds, or $111m).
The latter is a slow-growth side of Parity (8% in the first half) which exists only in the UK, and will not be extended into other markets. On the consultancy and training side, meanwhile, the UK is already only 32% of total revenue, with a tendency for that proportion to decrease as the other countries’ contribution grows.
That growth will be both organic and through acquisition, said the spokesperson. With the next five-year plan centring on becoming an international e-commerce consultancy, the group has appointed a corporate development director with specific experience in mergers and acquisitions.
We have no training operations in the US or continental Europe, so we’ll be seeking to get into that sector in the short term, said the spokesperson. Further down the road, they added, we need critical mass in both areas, so larger acquisitions may be on the cards.
