With revenues for 2004 on the increase, IT services group Morse is forecasting a return to spending in the investment banking market, as institutions once again begin to consider projects justified by competitive advantage.
For the year ending June 2004, the company posted revenue up seven per cent on last year to £390 million. Operating losses showed a marginal improvement, from £12.8 million (including amortisation of goodwill totalling £22m) to £11.1 million (including amortisation of goodwill totalling £18.6m). Pre-tax losses came in at £12.4 million, down from £14.1 million last year.
Looking to the year ahead, Morse is striking a confident tone, emboldened by a firming up of sentiment in the financial markets and its continuing evolution from IT reseller to technology integrator. To this end, the firm acquired high-end strategic consultancy CSTIM in April 2004 and project management outfit Diagonal after the year-end.
For the year just gone, financial markets turnover was up to £189.8 million from £152.1 million in the previous period. Spending in retail finance accounted for a larger proportion of sales than wholesale banking, says the vendor, and trading with retail banks continues to grow more rapidly owing to continued consolidation in the market and the requirement for compliance with new regulations.
However, the company notes: "We have witnessed an improvement in sentiment within our traditional investment banking base as, for the first time in several years, they begin to consider projects justified by competitive advantage."
Morse cautions that the up-tick in confidence has yet to feed through fully into spending patterns and that demand is more sluggish in continental German and French markets.
The vendor says the acquisition of CSTIM is paving the way for a new level of engagement in the finance sector, pointing to a project at AXA Investment Managers to define a strategic operating model for administration and back-office functions.
In retail banking, the firm is looking to emerging opportunities in the mobile commerce market. This follows from ongoing work with the Link ATM network to develop a product called MobileATM, which is intended to bring some of the functionality of the physical ATM to the mobile channel. Morse says the product is expected to enter a pilot stage in the coming months.