Sema Group Plc has reported its best year-end figures since the merger between CAP Group Plc and Sema Metra SA in 1988 (CI No 942) because, it claims, unlike its competitors, it focusses its systems integration skills on contracts that have a high level of technical content. Chief executive Pierre Bonelli said that as a result, the company was able to concentrate on vertical markets, where it holds a leading position, such as defence. Pre-tax profits for the year ending December 31 rose 38.8% to UKP19.5m, including UKP400,000 gains from the devaluation of sterling, while turnover grew 1% to UKP416.7m. If revenues from continuing businesses are compared directly, turnover actually increased 12.9%, with 1991 income amounting to UKP369m. The 1991 turnover figure, however, includes revenues from market research operation the Sofres Group, which was sold in January 1992 for a net profit of UKP15.4m. This gain was included in the profit and loss account as an extraordinary item, Bonelli said, ‘so as not to cloud the true operating position’ of the company.
No net debt
As a result, Sema now has no net debt, is cash positive to the tune of UKP5m, and has increased shareholders funds by 46% to UKP83.8m. Some 571 staff went with the sale of Sofres, bringing Sema’s total headcount to 6,920 worldwide. The disposal also meant that the UK is now the group’s single largest market, generating 41% of revenues ahead of France’s 37%. Last year, this figure was 35% and 42% respectively. The board is recommending a final dividend of 1.7 pence per share, bringing the total for the year to 2.8 pence, a rise of 7.7% on the previous year. All areas of Sema’s business were profitable with the exception of Germany – the company has now purchased the minority shareholding in Sema Group Systems AG that it didn’t already possess and integrated it with Sema Group GmbH. The restructured firm consists of three operating divisions; defence; facilities management; and I-Linie manufacturing management applications for mainframes. As expected, Sema and IBM Deutschland GmbH have now formally agreed to market each others products in Europe and also undertake joint product development (CI No 2,005). IBM’s German salesforce will sell I-Linie under its own brandname, while Sema will sell IBM’s CIMAPPS production and planning application, gradually phasing out its own offering. Sema is currently negotiating a similar agreement with IBM France and plans to woo IBM’s other European subsidiaries too. Bonelli hopes his German subsidiary will break even by the end of next year. Sema also acquired Dowty Group Plc’s share in joint venture company Dowty Sema Ltd, and has set up another joint venture with France Telecom, following Telecom and Paribas’s purchase of a 39.3% stake in the company. The new firm will specialise in civil telecommunications. In addition, Bonelli said he was very proud to report that BAeSema was now profitable, on turnover that grew 32.7% to UKP73m. Worldwide, the systems integration business saw turnover rise 15.2% to UKP318.2m, comprising 76% of overall revenues. Income from facilities management grew 8.8% to UKP59.7m, making up 14.5% of the total. Although this activity has traditionally been based in the UK, Spain and Germany are now taking the plunge as, Bonelli said, an increasing number of companies and goverment departments are outsourcing as part of rationalisation or downsizing projects. In the UK, facilities management contributed significantly to profits, contracts including a 10-year deal with the Heritage Department worth UKP10m. The software products arm improved sales by 2.3% to UKP38.8m, or the remaining 9.5% of turnover, but research and development spend in this area has been reduced from UKP14m in 1991 to UKP13.2m in 1992 as a result of the agreement with IBM. Geographically, France produced ‘an outstanding result’, and ‘encouraging trends’ were seen in Spain and Asia Pacific.
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