Sema Group Plc believes that its year-end results for 1989 places it firmly in the leading echelon of European computer services companies, second only to its contentious shareholder, Cap Gemini Sogeti SA. Turnover rose to UKP293m from last year’s pro-forma figure of UKP266.9m, and pre-tax profit reached UKP17.4m, up from UKP12.9m. Both the UK and Netherlands are back in profit after shedding over 200 staff during a period of rationalisation (CI No 1,262). The UK accounts for 37% of revenue, France contributes 44%, Spain 8%, Belgium 6% and the rest of the world the 5% balance. All European operations experienced growth, but the so-called non-strategic US and African markets actually declined. Sema says that the company is beginning to take shape as a European-wide group, but acknowledges that both margins and turnover could still improve. Management systems represents 42% of Sema’s activities, followed by technical systems at 24%, consultancy with 12%, market research at 10%, and facilities management at 8%. In terms of markets, finance is still dominant with 24%, and industry at 21%. These figures are very similar to 1988, and chief executive Pierre Bonelli anticipates the split will remain that way over the next few years. Bonelli forecasts that Northern Europe’s contribution to revenue will increase largely because of acquisitions. Sema acquired a 51% stake the West German software company, ADV/Orga, in December last year (CI No 1,331) for $14.5m, $11m upfront. Bonelli says that the German market has top priority, but he accepts that ADV won’t make a significant contribution to revenue until 1991, and there seems to be a consensus that the 600 staff will have to be cut and a program of rationalisation imposed. Sema also paid $5.1m for a 49% stake in Tibet SA, a French financial systems house (CI No 1,374), and Emnid, a West German market research company. Bonelli claims that maintaining growth at above market levels is a prerequisite to continuing a program of acquisitions. Sema says that the coming year will see the company concentrate on financial services and the industrial sectors, and both consultancy and engineering will be strengthened. Facilities management and value added information services are to be developed on the continent via Axone, Sema’s joint venture with IBM (CI No 1,302), and Sofres, the company’s market research arm which is to launch a subscription-based information network at some point. Bonelli says that Italy and Scandinavia are of low priority, and he doesn’t want to tackle the US market until the company is strong enough to compete in a big way. The Pacific Rim will develop via organic growth and subcontracting from the company’s base in Singapore. The key shareholder in Sema is still Paribas, with a 32% stake. Coal Industry Nominees – the British Coal pension fund – has 6.6%, Credit Agricole has 4.7%, and Scottish Amicable has 3.7%, leaving only 15.8% of the shares freely traded, which means that any predator has to unlock at least one of the friendly shareholders – more than one if Paribas, which looks the solidest of the lot, stays that way. Bonelli believes Scottish Amicable is a friendly but not necessarily long term investor. Schneider has increased its holding to 7.7% after acquiring 5% formerly held by the World Software Group’s Volmac BV (CI No 1,362), and it is keen to increase that to 10%. Bonelli seems to welcome this and says there are new opportunities for joint projects. However, there’s still a joker in the pack that Bonelli doesn’t welcome with quite the same relish. Cap Gemini Sogeti still owns 22.6%, and Bonelli says that it seems determined to be a long term investor – despite the total lack of discussion or co-operation between the two companies.
