Mixed bag of Easter trading updates

(By Anthony Miller – Thursday, 9th April 2009 9:00am). A slew of trading updates this morning show the extremes in fortunes of the rich variety of players in our market.

At the ‘happy end’, Autonomy expects to report record Q109 results ahead of consensus (see here). Similarly, telecom software player Intec appears to have shrugged off last year’s abandoned bid approaches (see Intec confirms guidance as offer talks abandoned), and expects to report a record first half (see here). As I write, Autonomy’s shares are up 2% and Intec, a huge 17%.

At the ‘grim end’, recruitment firm Hays reflected the downbeat assessment of peers Spring Group and Michael Page earlier this week (see No let up in ‘challenging’ recruitment market) reporting Q3 net fee income down 31% like-for-like (LFL), and an even grimmer -37% in the UK (see here). Permanent recruitment is still in a deep hole (-46% LFL), with contracting NFI ‘only’ down 14% LFL. However, Hays’ UK public sector (around a third of UK NFI) grew 3%. Hays’ shares are down 2%.

Somewhere in between lies The Innovation Group (TIG), whose ‘mature’ markets (UK, Germany, S. Africa, Australia) have “performed well”, but whose US outsourcing business is still “significantly” loss-making. TIG’s shares are nonetheless up 13% to 6p, though still well below the 15p level mooted for the abandoned Carlyle bid (see Carlyle backs out of TIG bid).

We certainly expect more bad news than good in the quarterly reporting season. The major India-based SIs kick off next week with Infosys on 15th April. Infosys sets the tone for the rest of the Indian offshore sector and, as it’s their FYE, would be expected to guide for the following 12 months. Management’s prognostications will be examined in great detail to seek signs of any return in customer and vendor confidence.