Canada’s second largest indigenous IT services firm Cognicase Inc has taken a $300m hit during its full-year 2002 to write down the impaired value of some recent acquisitions.
Montreal, Canada-based Cognicase, which ranked as one of the most acquisitive IT services firms of the past year, took the CAD 478.5m ($301.5m) charge in its fourth quarter ended September 30, to write off its goodwill against acquisitions, which have totaled nine since the start of the year. The most recent was the purchase of AVI Software in June, which develops accountancy software for small and medium-sized business with a particular focus on construction companies.
At the same time the company turned in a net loss of CAD 490.1m ($308.8m) during the fourth quarter compared to net loss of CAD 16.4m ($10.3m) in 2001, on revenue that grew 32% to CAD 133.1m ($83.9m). For the full year period, Cognicase turned in a net loss of CAD 471.3m ($296.9m) compared to a net loss of CAD 31.3m ($19.7m) on revenue that grew 27% to CAD 513.2m ($323.3m).
Systems integration was the best performer during the year, growing 35% to CAD 158m ($99.5m) during the year. Meanwhile the largest division, processing and outsourcing services grew, 23% to CAD 356m ($224.3m). However, the company’s profitability has also been impacted during recent months by its European operations, where it made 13% of its full-year 2001 sales in France, Belgium and Spain.
This has largely been built through acquisition, principally the purchase of French IT consulting firm Groupe Logispace in June 1999, which gave it 120 employees. In July, Cognicase was on the look out to dispose of its European business, however in the fourth quarter the company appointed a general manager in France to return the operation to profitability.