Thursday, 18 June 2009

Mouchel ticks the wrong boxes

(By Anthony Miller – Thursday 18th June 2009 7:45am). In much the same way that UK BPO ‘pure-play’ (well, nearly) Xchanging surprised the market with a revenue warning in May (see Xchanging ‘triple whammy’ revenue warning), larger peer, Mouchel, has just gone and done much the same (see here). After a pretty rosy set of half-time results back in March (see Mouchel ticks most of the right boxes), their Consulting business appears to have turned pear-shaped as bidding costs for major local government deals escalated.

It was also apparent from the trading update that Mouchel plays more directly in the UK IT services market than we were previously given to understand. For example, they referred to SAP projects they are currently undertaking at Staffordshire County Council and the London Probation Service. Like RM, Mouchel also plays in the BSF (Building Schools for the Future) programme, including in ICT. They are also part of the CSC Alliance in the NHS NPfIT (I almost said ‘for their sins’). However, we have been unable to get an accurate sighting of their UK SITS revenues but don’t believe they are yet a ranking player. We will delve deeper!

These ‘surprises’ at two otherwise reliable BPO firms really does run counter to our views that BPO is one of the safer havens in a downturn. They will undoubtedly cast doubt on the near-term outlook for other BPO players, notably Capita, even though the nature of the services are rather different. The last trading update from Capita was back in May (see Capita on track to retain Boring Award) and all looked like it was going swimmingly well. I’m not sure we’ll hear anything more from them till their own half-time results, usually scheduled towards the end of July. Let’s hope there are no more unpleasant surprises!

No comments:

Post a Comment