Vega Group Plc has spent 9.7m pounds ($15.3m) to buy Crew Services Ltd, an IT consultancy that offers procurement services for companies making substantial investments in IT and communications systems. The acquisition comes after Vega recorded a 33.2% increase in net profit to 2.8m pounds ($4.4m) in the year though April 30 on revenue 29.1% higher at 28.9m pounds ($45.6m).
The company has traditionally concentrated on the defense sector, a lucrative market but one which has not helped Vega’s stock price in the past because of the perception that the end of the cold war will squeeze military spending.
Vega has always been bullish about the future of its defense activities, which now account for 32% of revenue, on the basis that shrinking budgets force defense chiefs to concentrate on spending that increases productivity. Certainly the prospects for the current year are good, with the defense order book amounting to 57% of Vega’s 31.3m-pound order backlog.
With a close relationship with the European space agency, the space sector proved the biggest revenue earner last year with a total of 9.3m pounds, or 39% of the total.
Vega is expanding rapidly in civilian market, capitalizing on the training technology it has developed. Its acquisition of the aviation division of TRO learning gave Vega a foothold in commercial aviation, where it has hopes in the North American market through a partnership with Smith Industries.
Commerce and industry, while providing a modest 16.2% of revenue, is an area where Vega sees opportunities with its process automation package. It sees prospects for selling its training and multimedia services in the automotive, finance and telecoms markets.
Now with the acquisition of Crew Services, Vega believes it can not only strengthen its presence in the defense markets, but has an opportunity to enter the healthcare and police markets as well.
