(By Anthony Miller – Tuesday, 31st March 2009 9:00am). ‘Serco-lite’ – more accurately known as UK-based BPO player, Mouchel, substantiates the case that outsourcing in general, BPO in particular, and public sector especially, are safer havens in these stormy seas. Half-time revenues grew 11% organically (see here) to £366m, with the Hedra and HBS acquisitions pushing headline growth to 19%. “Adjusted” margins (sans nasty bits) rose 90bps to 6.8%, though true margins jumped 200bps from 3.5% to 5.5%.There’s not a huge amount of Mouchel’s business we’d call software and IT services (SITS) ‘within the meaning of the act’, but with over 40% of its revenues coming from the UK public sector, Mouchel are sure to bump into Capita, Liberata, et al from time to time. Being more oriented towards infrastructure projects (e.g. highway maintenance), Mouchel is seeing some early benefit from the Government’s ‘fiscal stimulus’ package. We think the more traditional SITS players will have to wait longer to see the effect of these initiatives flow through as IT projects.
The only major bad news I could see in Mouchel’s results was a fall-off in its Middle East business, where it experienced “a sudden slowdown in demand for infrastructure development in Dubai”. ME is just 10% of Mouchel’s revenues.
The other highlight of Mouchel’s results was the successful renegotiation of its banking facilities, to the tune of £190m over the next three years. I would assume businesses that can show a high proportion of long-term recurring revenues from ‘assured’ sources will get a much more favourable hearing from banks than others!
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