Tuesday, 1 September 2009

Steria, Sopra losing UK share

(By Anthony Miller – Tuesday 1st September 2009 9:00am). Two smaller France-based SIs, Steria and Sopra, gave a rather different picture of the UK market than Atos Origin and Capgemini (see Atos and Capgemini UK update) in their first-half numbers. Both registered UK revenue declines (in constant currencies), Steria by 2% (to €320m) and Sopra a rather more dramatic 14% (to €29m). This contrasts with Atos’ 6% UK growth and Cap’s stellar 13%. Logica, by the way, grew 7% in the UK. But Steria remains far and away the UK margin leader, with a cracking 11.2% ‘adjusted’ operating margin, up 1.5 pts yoy. Sopra also boosted UK margins, by 2 pts to 5.1%, but remains the laggard – none of the others went much above an 8% margin.

It seems that Steria and Sopra are losing UK share, Sopra dangerously so. We have written before about Sopra’s need for scale (see Sopra still finding UK tough going) and I will be meeting UK MD, Pierre-Yves Commanay again next week to better understand his plans and expectations for a return to growth. I will also be talking to Steria UK MD, John Torrie, to find out what’s driving the rather good order flow (up 14%, with a 1.2x book-to-bill). Certainly the recent wins at the IPCC (see Steria to handle police complaints) and the UK passport office BPO deal (see Steria wins BPO side of CSC’s passport contract) must be a significant part of this. I’ll also be curious to hear to progress on driving their (ex-Xansa) offshore delivery services into the heart of Steria’s business in France. More on both players in due course.

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