(By Anthony Miller – Thursday, 12th March 2009 8:55am). Gosh, I remember a time when Parity was an international player riding high in the UK software and IT services rankings with revenues over £300m and 6% pre-tax margins – that was back in 1999, by the way. A much slimmed down Parity reported £149m revenues last year and a £2.5m pre-tax loss (see here). Thank goodness they have finally ditched the Training business, which lost nearly £4m pre-tax last year. It was acquired last month by Dubai-based management consultancy, ECS, after an agreed offer from Xpertise went horribly pear-shaped (see Xpertise shareholders vote against Parity Training offer).Parity is now left with its Resources (ITSA, i.e. IT staff agency) business, which generated 83% of the now £132m continuing revenues and over 70% of the profit, and its Solutions (project services) business. Whereas Parity had managed to boost Resources margins 100bps to 3.4% on flat revenues (£110m), Solutions suffered a 29% revenue decline, with margins slumping from 10.3% to under 5% (including restructuring costs). On the bright side, over 60% of Parity’s continuing revenues came from the Public Sector, which will be a useful safety net for the current troubled times. On the not-so-bright side, Parity now finds its Solutions business competing not just against the usual mid-tier suspects, but also against the larger SIs, who are scrambling down the food chain as the mega-deal end of the market dries up. This is double trouble as these guys are generally well endowed offshore and I’m sure they are bringing very competitive prices to the table. As best as I am aware, Parity has no offshore delivery.
Anyway, I’m off to the investor briefing shortly and will update you later.
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