Cap Gemini Sogeti SA is expected to buy the 31.5% stake in Hoskyns Group Plc that it does not already own for 469 pence per share in 1993. As a result, Hoskyns has reorganised operations to mirror its parent company’s new corporate structure with the aim of becoming a fully-integrated transnational company. Cap Gemini now […]
Cap Gemini Sogeti SA is expected to buy the 31.5% stake in Hoskyns Group Plc that it does not already own for 469 pence per share in 1993. As a result, Hoskyns has reorganised operations to mirror its parent company’s new corporate structure with the aim of becoming a fully-integrated transnational company. Cap Gemini now has five divisions: consulting, project services, information systems management, education and training, and software products. The software and services company is attempting to move from being a ‘strategic assembler to a strategic integrator’. Hoskyns has additionally pruned its management structure in an attempt to make it simpler and more responsive to an increasingly competitive market. But it said its financial results suffered this time because of the continuing UK recession. Pre-tax profits for the year to October 31 fell 35.5% to UKP9.5m, while turnover dropped 1.5% to UKP197.7m due partly to a significant decline in education and training revenues. Hoskyns did point out, however, that if disposals and the run-down of Plessey FM weren’t included, turnover actually grew 6%. Net profits were flat at UKP5.4m after UKP2.5m redundancy costs this time and UKP4.2m charges last time from the sale of Computer Based Training. However, things are said to be improving. Second half sales were 6% better than the first half and trading profits were 14% better. The company is paying a final dividend of 1.65 pence per share, bringing the total for the year up to 2.40 pence; the same level as last year. Despite tight margins – down from 7.1% last year to 4.8% this year – and the emergence of new competitors – hardware manufacturers, large users and telecoms operators all trying to find alternative ways of making money – Hoskyns said that facilities management sales were strong. Cut-backs have caused a major reduction in information technology expenditure and Hoskyns states that more and more companies are attempting to reduce on-going costs by outsourcing. The company said that it signed twice as many facilities management contracts in 1992 as in 1991, and its order book is now worth UKP175m. As a result, 408 new technical staff have been taken on over the past year to cope with the boom, bringing the total headcount to 3,338. New customers this year include Heinz, Bristol Water, the Bank of England and Citibank. Facilities management services come under the heading of information management, which also includes applications management and the support and maintenance of distributed computing environments. One of Hoskyns’ new roles is to develop this area of business for Cap Gemini worldwide. The software products sector benefitted from a continuing shift from custom to packaged software.
Sales of the project management tool, Project Manager Workbench, applications software for the AS/400, packaged software for the construction industry and technical wholesalers were particularly good. Customers were much more reluctant to fork out for project services, however. The notable exceptions to this rule were companies downsizing from mainframes to client-server and distributed computer environment. In response, Hoskyns has spent a lot of cash on retraining its staff, especially in open systems. The education and training division also suffered from organisations cutting spending. It was formed this year from an amalgam of previously separate businesses. Hoskyns consulting business is working with Gemini Consulting to provide management consultancy services across Europe.