Software and IT services vendor Northgate Information Solutions Plc’s increased focus on higher-margin business helped it grow net profit by 55% in the first half of its fiscal year.
In the six months to the end of October 2006, Northgate reported net profit of 10.2m pounds ($19.9m), up from 6.6m pounds ($12.8m) in the same period of the previous year, on revenue that grew 1.5% to 165.2m pounds ($323.2m).
The move to higher-margin work has been led by Northgate’s managed services division, which provides application implementation and systems integration services. Over the six month period, the division grew operating profit by 66.3% to 4.3m pounds ($8.5m), despite suffering a 1.4% drop in sales.
With revenue from Northgate’s public services business unit also falling, it was down to the company’s human resources business to drive the company’s sales in the first half of the year. HR revenue rose 7.8% to 60.5m pounds ($118.4m) and the operation’s order book was up 19% compared to the end of October 2005.
The performance of Northgate HR was boosted by a number of recent acquisitions, including BIM, a payroll processing business for SMEs, Engage Technologies, which develops time and attendance software, and Edis Partnerships, a provider of pensions administration software and services.