Tuesday, 6 October 2009

Mouchel derailed

(By Anthony Miller – Tuesday 6th October 2009 7:30am). Much as presaged in its June trading update (see Mouchel ticks the wrong boxes), business and support services player, Mouchel, had rather a mixed year (see here) as the recession bit hard into its consulting revenues and Middle East business, plus its withdrawal from the rail market. But a fair portion of what’s left pitches Mouchel firmly in ‘our’ territory, especially with plays in local authorities and education. Indeed, Government Services represented over 40% of Mouchel’s £741m FY09 revenues (+13% yoy as reported, +9% yoy organic), though margins in this segment fell 60bps to 4.8%, below group average (6.4% ‘adjusted’).

We are still trying to piece together the Mouchel ‘story’ in the UK IT/BPO services market and will bring you more as it unfolds. But as a rule of thumb, cost-saving propositions in BPO and public sector ought to be two of the safest havens in the current downturn, which makes you think perhaps Mouchel should be doing a darn sight better than running below half of Capita’s margins in these segments.

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