Those well-publicized problems with computers at the Olympics during the summer did little to dampen the celebrations at Sema Group Plc’s interim results meeting for the half year ended June 30: chief executive Pierre Bonelli simply read out a statement from the Atlanta Committee for the Olympic Games effectively absolving the software that Sema supplied from any of the blame. Then he got on with explaining the details behind what he called an excellent first half performance. Pre-tax profits were up 23% at 19.8m pounds and revenue rose 32.6% to 426.9m pounds compared with the same period last year. Organic growth had been evident in virtually every country, every industry sector and every activity category in which we operate, said Bonelli. But the major growth areas were the facilities management and telecommunications businesses. The former expanded organically by around 40%, mainly in the UK, where Sema won contracts from TSB Group Plc and the Department of Social Security, but also in Sweden and the Far East. And revenue swelled by 30m pounds due to the inclusion of TSFM SA, now renamed Sema Group Outsourcing SA, 40% of which was acquired from France Telecom last year (CI No 2,804). This is set to increase further, with the more recent acquisition of Syntax Processing SpA from the Olivetti Group, immediately after the close of the period. The Syntax deal (CI No 2,958) takes Sema back into Italy for the first time in 12 years and strengthens its presence in the Benelux region. Fueled mainly by the continued success of mobile phone products, the telecommunications business grew 95%, and now accounts for nearly 12% of overall revenue. Telecoms is our our main priority said Bonelli. After several years of effort, the group won permission from the US Federal Reserve Bank to market CABS, its customer care and billing system, in the US. But further expansion there is still subject to the US Banking Law, due to the fact that 41% shareholder Financiere Sema SA is itself 51% owned by the Banque Paribas, and is therefore deemed to be part of a bank. Bonelli is hopeful this can be circumvented, but he’s been saying that for a number of years now. If Sema does get the go-ahead, US acquisitions will be the order of the day. Other Sema operational areas include disaster recovery a profitable niche business growing rapidly, mainly in the UK and Far East and systems integration, which has grown overall by 15%, mainly in France. A recent two-for 11 ri ghts issue raised 99.1m pounds, used mainly to fund the acquisition of Syntax. Looking at strategic trends, Bonelli split Sema’s business in three ways. The established technical systems business for defense customers and the likes of BP, is on the decline, though still accounting for 29% of overall revenue. Telecommunications systems, including outsourcing, facilities management and systems integration, is rising rapidly. Business systems work is down slightly. Finally, sports fan Bonelli, despite the Olympics, was pleased with Sema’s other sporting venture, Euro ’96, which saw its name splashed across European television screens. So how about the Soccer World Cup in France in 1998? Well no, as Electronic Data Systems Corp signed up for it two years ago. But they’re doing it free, Bonelli said, and in France, we’d want to be paid.
