Anite Group Plc, the UK-based services and software company, is moving closer to a focus around strong core activities rather than the hodgepodge of operations that have disfigured the company’s operations for so long.
No ‘For Sale’ signs have been hauled up over any of the company’s operations. But it is clear from the report for the year through April 30 that the company’s aim to position itself around a high-end IT consultancy business can only be achieved if it unloads a number of existing operations.
Anite, formerly Cray Electronics Plc, had been a prisoner of a flawed vision that if it plunged into many markets it could end up as top dog in some of them (CI No 3,635). Happily, the pioneer of this approach has departed and Anite is now led by people who see the need to concentrate capital and resources on a limited number of related areas.
Net profit of 3.8m pounds ($6m) is hardly comparable with the 20.9m pounds ($33.2m) achieved in the previous year, as this was inflated by the sale of its UK network integration and support services division to Cable & Wireless Plc for 47m pounds ($74.2m). A flurry of acquisitions helped revenue to rise by 20.9% to 180.2m pounds ($284.7m).
Anite has dumped low-margin business and has invested in European IT consultancies, with revenue from these operations that grew from 5m pounds ($7.9m) to 50.5m pounds ($79.7m) last year. What it would appear the company needs to do now is to build a convincing strategy around this resource.
It has an established software business that increased revenue 40% to 51.6m pounds last year. Yet this produced lower profits, due to small businesses which Anite says have been restructured and are now profitable.
One area where Anite can generate money for further acquisitions is its remaining telecoms business, where increased sales of its GSM test sets have helped profits to grow strongly. Equally, its travel business and IT resourcing operations seem a distraction from the main business.
