Thursday, 12 November 2009

Steria UK revenues drop 15% in Q3

(By Tola Sargeant, Thursday 12th November, 2009, 19:00) Steria’s revenues were €372.9m in Q3, 9.1% down on the same quarter in 2008 on a like-for-like basis. The main culprit was the UK where quarterly revenues dropped by an alarming 15% on an organic basis to €141.7m. Apparently the decline in the UK was mostly due to the delay in the start-up of a number of contracts and a lower than expected level of discretionary spending.

The good news for the UK business, however, is that the company expects positive organic growth in Q4 as the delayed contracts begin. New orders in the UK remained strong in Q3, thanks to wins such as those 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), leading to a book to bill ratio of 1.18. This may not be enough to take the UK into positive growth territory for the full year – in the first nine months of FY09 UK revenues declined by 6.5% (organic) to €462m.

For the company as a whole, it’s actually the managed services and business process outsourcing business that is finding it toughest going. Organic revenues in the business unit were down 9.2% in the first nine months of FY09 to €429.3m. By comparison, the Consulting and Systems Integration business only saw a 1.6% drop in revenues in the same period to €749.0m.

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