Linedata operating income moves up in first half

Source: Linedata Services

The first six months of 2006 saw Linedata Services post revenues of EUR 71.0 million for an internal growth rate of 4.7%.

Recurring operating income improved by 31.7% to EUR 8.3 million on the back of an improvement in profitability across each of the Group’s three businesses. Operating income, for its part, increased 10.7%, the first six months of 2005 having included the EUR 1.7 million in indemnities received from FMC.

Net income for the first half totaled EUR 5.0 million, resulting in a net margin of 7.0%.

With a gearing of 27.4% at June 30 as against a figure of 30.7% at the end of 2005, Linedata Services has a sound financial structure for its future development.

With revenues of EUR 43.9 million for an internal growth rate of 11.1%, Linedata’s Asset Management activity improved its proforma operating margin to 10.6% compared with 8.3% in 2005. This increase is largely due to the successful integration of Beauchamp and GIS, which substantially improved their profitability levels in line with Group expectations. Moreover, this operating margin includes the investments incurred over the first half on the Group’s strategic LyNX and LAP programs in the United States.

Activity in the second half of the year is expected to continue in the same vein and secure an internal growth rate of at least 10%. This growth should come hand-in-hand with a strong improvement in operating profitability in the second half of the year given the seasonal nature of revenues (sale of major licenses) and the activity’s stable cost structure.

Down 1.4% over the first half of 2006, Linedata’s Savings & Insurance activity nonetheless posted a major improvement in its operating margin of over 5 points to 19.3%. This performance comes on the back of the substantial improvement in profitability within the Group’s Insurance business. The Group’s excellent visibility as to the activity as a whole should enable it to exceed initial expectations and generate growth of over 7% whilst also continuing to improve its operating margin over the second half.

Lastly, despite the temporary dip in its revenues of 7.2%, Linedata’s Leasing & Credit Finance activity nevertheless maintained its operating margin at 7.2% thanks to an impeccably managed cost structure. The turnaround forecast for the second half of the year should enable the activity to gradually bring its profitability in line with Group standards.

2006 targets confirmed

Bolstered by the strong outlook for its three businesses and by the usual seasonal trends that protect its margins, Linedata Services has confidently confirmed its target of internal growth of over 7% for a recurring operating margin of at least 17.4%.

Moreover, with the integration of Beauchamp and GIS already proving a success, Linedata Services intends to rapidly pursue its federating role on a thriving market.

Linedata Services will publish its revenues for Q3 2006 on November 7 after the close of the markets.

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