Software and IT services provider Anite Group Plc was hit by goodwill write-downs in the first half of its current financial year, and said that it would halt its acquisitive run during the next six months.
In the six months to October 31, the Reading, UK-based company made a net loss of 45.3m pounds ($71.2m) after amortization of goodwill, compared to a comparable profit of 1.4m pounds ($2.2m) in the year-ago period. Revenue increased 17% to 111.5m pounds ($175.2m).
During the period, the company took a goodwill write-down charge of 39.1m pounds ($61.4m) and also suffered a 1.5m pound ($2.4m) trading loss at its German SAP consulting business. The company implemented a headcount reduction of 30 staff in this part of the business and in its travel division, and is cutting 70 further positions during the second half. Anite made just one purchase in the first half, public sector integrator CME Systems Ltd, and said it does not plan to make any further acquisitions in the second half of its current financial year.
Anite operates in three main vertical markets, and the public sector was its strongest performer during the period with sales growing by 54% to 36.4m pounds ($57.2m). New orders in the public sector increased by 47% during the first half, although operating profit fell 57% to 1.2m pounds ($1.9m) on the back of increased R&D expenditure and the cost of bidding for its contract with the State of Victoria – its largest single deal to date.
Anite’s travel business increased operating profit by 50% to 3.3m pounds ($5.2m) on sales that grew 37.3% to 16.2m pounds ($25.5m). The company’s telecoms business produced mixed results in tough market conditions. Revenue grew 18.3% to 21.3m pounds ($33.5m), but operating profit fell 29% to 4.1m pounds ($6.4m), and it said the telecoms billing business it acquired through ISV Calculus Solutions made no contribution during the period, compared to year-ago sales of 1.9m pounds ($3m).
The company said that its consulting operation was experiencing pricing pressure particularly in the Netherlands and Germany, which led to a 52% decrease in operating profit to 3.2m pounds ($5m), on revenue that fell 4% to 37.6m pounds ($59m). Anite said it expects growth from applications management contracts in Germany and from new projects with the German army, which is planning to undertake a huge outsourcing project with Computer Sciences Corp.