GFT posts H1 earnings growth

Source: GFT Technologies

Following a strong second quarter, GFT Technologies AG (GFT) has once again stepped up the pace with strong growth in revenue and earnings in the first six months of 2011.

Consolidated revenue reached EUR 141.80 million in the first half of 2011 - up 24 percent on the same period last year. EBT grew by 19 percent to EUR 5.52 million (prev. year: EUR 4.65 million). Growth was particularly dynamic in the Resourcing division.

"With our international network of specialists we were perfectly placed to meet the strong demand for highly skilled, flexible IT specialists in the industrial and financial sectors," explains GFT's CEO Ulrich Dietz. "At the same time, there was consistently high demand for our mobile solutions in the field of investment advice and for our intelligent customer management applications." GFT's Executive Board has upheld its forecast for 2011 as a whole and expects to reach revenue of EUR 275 million and EBT of EUR 13 million. "The growing shortage of skilled labour will continue to drive growth in the second half of the year. Against the backdrop of the finance industry's current challenges, we have demonstrated that our Services division can offer clients compelling modern solutions."

Graham Underwood, Managing Director of GFT UK commented, "GFT's second quarter results build on the positive first quarter the company experienced, despite the challenging economic climate. We're seeing more demand for our mobile solutions from investment banks, as well as increasing demand for the augmentation of internal IT teams. The impact of regulatory change and the demand for specific skills and teams which this will generate, is expected to have an bearing on the rest of the year".

Revenue: growth of 24 percent; Resourcing division posts high growth rates in Germany and France

The GFT Group generated total revenue of EUR 141.80 million in the first six months of 2011 (prev. year: EUR 114.68 million). This corresponds to growth of 24 percent over the same period last year. This positive trend can also be seen when comparing quarters: second quarter revenue reached EUR 74.50 million compared to revenue of EUR 67.30 million in the first quarter. This strong performance over the first six months of 2011 resulted mainly from a significant rise in revenue generated by the Resourcing division. High demand for freelance IT experts and engineers in all sectors and countries led to dynamic growth in this segment. With revenue of EUR 83.54 million (prev. year: EUR 58.44 million), the division made a major contribution to total revenue. The segment's Resource Management business was particularly successful with revenue growth of 49 percent to EUR 42.20 million (prev. year: EUR 28.44 million). Third Party Management also enjoyed strong growth with revenue of EUR 41.14 million (prev. year: EUR 30.00 million) - an increase of 37 percent. Growth rates were high in the Resourcing division's German and French markets. In Germany, revenue rose by 25 percent and in France by 65 percent. In addition to expanding relations with existing clients - especially via projects in the industrial sector both inside and outside Europe - there was also a significant increase in new customer acquisition in the first half of 2011.

The Services division utilised the opportunities presented by a challenging market environment in the financial sector. Segment revenue amounted to EUR 58.26 million in the first six months and thus exceeded the high prior-year level of revenue by a further 4 percent (prev. year: EUR 56.21 million). In addition to outsourcing services and IT solutions for corporate and investment banking clients in the UK and USA, there was also strong demand for innovative solutions in the field of investment advice and customer management. Despite adverse market conditions in Spain, the Services segment succeeded in once again raising its high revenue level. Revenue generated with clients in Spain grew by 13 percent in the period under review. In Switzerland, the acquisition in June 2011 of Asymo AG - one of the leading Swiss IT consultants for the core banking solution Avaloq - not only added top-class consulting expertise for standard software to the GFT Group's service portfolio, but also expanded its client base in Switzerland. Asymo AG was consolidated in June 2011. Total revenue generated in Switzerland in the first six months of the year rose by 63 percent.

Earnings: growth of 19 percent; Services division accounts for largest share

In the first six months of 2011, earnings before taxes amounted to EUR 5.52 million, representing year-on-year growth of 19 percent (prev. year: EUR 4.65 million). In addition to increased revenue, the key factors were successful steps taken to raise productivity and ongoing efforts to optimise costs. The Services division was able to build on its strong order position in the financial sector and made the largest contribution to earnings with EUR 4.56 million - a 14 percent increase in its segment result (prev. year: EUR 4.01 million). The Resourcing division posted strong growth in earnings: at EUR 1.65 million, it raised its segment result by 93 percent (prev. year: EUR 0.86 million).

Further key figures: solid balance sheet structure; increase in headcount

Net income for the first six months amounted to EUR 3.63 million as of 30 June 2011 and was thus 2 percent higher than in the same period last year (EUR 3.55 million). Cash, cash equivalents and securities stood at EUR 18.09 million as of 30 June 2011 and was thus down on the previous year (EUR 26.44 million). Earnings per share improved to EUR 0.14 in the period under review, compared to EUR 0.13 in the previous year. The number of employees rose by 9 percent year on year. As of 30 June 2011, the GFT Group employed 1,317 people - 108 more than in the previous year. In Germany, headcount increased by 5 percent to 280 persons as of 30 June 2011 (prev. year: 267).

Outlook: further growth expected for Resourcing division; forecast for year as a whole confirmed

"Against the backdrop of a strongly positive development in the first six months, we remain optimistic for the year as a whole. In the financial sector, our wide range of services and international alignment enable us to react quickly to market needs," explains GFT's CEO Ulrich Dietz. The Executive Board expects GFT's steady growth to continue in the rest of 2011 and confirms its forecast made in the Consolidated Financial Statements 2010: namely, total revenue of EUR 275 million and earnings before taxes of EUR 13 million. Strong demand for freelance IT specialists and engineers is expected to generate dynamic growth rates in the Resourcing division in particular. As Ulrich Dietz states: "Flexible working models are the future. We provide freelance experts for the industrial and financial sectors, giving companies the necessary manpower flexibility and meeting their needs for skilled personnel." 

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