The Investment Column: FI paints bullish growth picture
Friday 16 January 1998
When a company has just reported a 54 per cent increase in first-half profits to pounds 4.31m, as FI Group just has, raising these fears may seem overly gloomy. But Hilary Cropper, chief executive of the applications management specialist, has a convincing response to both. She points out that fixing computers' inability to recognise the year 2000 as a valid date currently accounts for just 12 per cent of the group's sales. What's more, the rush to fix the problem has prompted firms to put other, less pressing, IT projects on hold until the next decade. By then, the UK's likely entry into monetary union will have thrown up a whole load of new gremlins for FI to tackle.
FI's real secret weapon, however, is IIS Infotech, the Indian computer services company it bought for pounds 25m last month. By farming out work to India, the group will be able to tap into a labour market which produces more software graduates than the US each year, all willing to be employed at a fraction of the cost of a British programmer. That allows FI to move beyond serving its traditional areas of finance, retailing and the service sector. The group thinks it can start undercutting its competitors and pinch contracts in the manufacturing and consumer goods industries, as well as the City.
All this adds up to a very bullish growth picture. That said, the shares reflect this. Brokers reckon full-year profits will be pounds 9.5m, rising to about pounds 13m the following year. That prices the shares, which edged up 5p to 1002.5 yesterday, at a staggering 38 times April 1999 earnings. FI is an impressive business with better prospects than most of its peers. But for the time being it's hard to see the shares rising much further from these heady levels.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Watch a man race the Circle line - and win
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 Grandmas keep accidentally tagging themselves as Grandmaster Flash on Facebook
Islamic State: Pope is 'being targeted by Isis', Iraqi ambassador to the Holy See warns
Jennifer Lawrence and Kate Upton nude pictures exhibition cancelled after artist concedes photos were 'stolen property'
Scotland independence: A nation divided against itself: Brown says SNP are liars. Darling joins in. Salmond fights back
John Travolta addresses former pilot's gay romance allegations publicly for the first time: 'That was the lowest I'd ever felt'
Richard III: Two years after his body was found scientists discover how he died
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Portuguese academic says British are 'filthy, violent and drunk'
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...