Investment: Skillsgroup in pounds 70m buying spree
Wednesday 03 February 1999
David Southworth, Skillsgroup's executive chairman, said yesterday the group was looking at a number of privately owned companies that would give Skillsgroup a presence in the fast-growing market for designing Internet- based computer systems.
"There are one or two companies in that area we are interested in," Mr Southworth said.
However, he stressed the company did not want to be in "me-too" information technology services, such as implementing enterprise planning software for major companies.
An acquisition would be Skillsgroup's first expansion after a lengthy period in which it has shrunk dramatically.
In the past year, the company has sold most of its distribution businesses in order to concentrate on QA, its training arm, and Acuma, which installs large computer servers.
In the year to last November, pre-tax profits from continuing operations jumped 36 per cent to pounds 12.2m on revenues up 16 per cent to pounds 162m.
Mr Southworth said operating profits were expected to grow by 20 per cent this year before the impact of any acquisitions.
However, he predicted that the final quarter of the year was likely to be tough as companies put projects on hold before the end of the millennium.
The City responded positively to the results, driving the shares up 3.5p to 236.5p.
One analyst pointed out that a large chunk of Skillsgroup's revenues comes from reselling computer hardware rather than services, highlighting the need for an acquisition.
However, he added that on a multiple of just 17-times expected 1999 earnings the shares were still good value compared to the rest of the information technology sector.
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