Tola Sargeant
Fujitsu Services reports solid growth
Fujitsu Services, the European-centred IT services arm of the Fujitsu Group, today revealed an encouraging set of results for the year to 31st March 2005. Total revenue increased by 14.5% to £1.99bn (€2.94bn) and PBT increased by 69% to £85m (€126m). Operating profit before exceptional items was £74m (€109m), compared to £54m (€80m) the year before. Comment: It seems 2004/5 was a very good year for Fujitsu Services - CEO David Courtley and his team will be justifiably pleased with double-digit revenue growth and a significant improvement in profits (let us not forget that Fujitsu Services only returned to profitability in 2002/3). Of course, growth rates are helped by the fact that Fujitsu Services now includes bits of Fujitsu Consulting and the former Amdahl data centre support services operation, FTSI, which didn't contribute to revenues in 2003/4. True organic revenue growth is closer to 9%. But given its recent contract wins in the UK, we suspect that UK growth was slightly stronger still - pretty impressive compared to the UK S/ITS market, which (as our analysis shows) grew 5.4% last year. In other words, Fujitsu Services is taking market share in the UK. UK government business has clearly contributed to this growth. Recent Fujitsu wins in the sector (either as a prime or subcontractor) include Aspire at the Inland Revenue, DII (Future) in defence, the Southern region LSP contract with the NHS (although we do not believe it has recognised any revenues from this contract yet) and some sizeable local government deals. But Courtley also highlights a significant upturn in Fujitsu's new business in the commercial sector, particularly in the retail and finance sectors, such as its £170m (€250m) five-year deal with Lloyds TSB, for example. Given this recent success across the board and its strong backlog and order book, currently at a record £6.2bn (€9.2bn), we'd be surprised if revenue growth didn't continue next year. Fujitsu will also be looking to build on improvements in productivity, particularly in mainland Europe, to ensure that profitability keeps moving in the right direction.
