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Scisys, the software and services provider to the government, space and broadcast & media sectors, said trading in the first half of 2012 is proving more buoyant than originally expected, due to a combination of new contract wins, operating efficiencies and deferred costs. This is an encouraging change of position following a disappointing FY11 (see Scisys confirms tough year).
Scisys said it is ‘comfortable’ with its order book, which stood at £26.7m at the start of the year. Things have improved since then, to £28.8m by the end of March, an increase of 8% on last year. Good news is that this also excludes any SCISYS' expected participation in the MoD’s Warrior Armoured Fighting Vehicle upgrade programme later in the year, where it is again subcontracting to Lockheed Martin (see here). Scisys already works with Lockheed Martin on the MoD’s Future Deployable GEOINT (FDG) System contract, which it was awarded back in December (see here).
Scisys remains heavily reliant on the UK Government sector, and unsurprisingly the outlook for new business here remains uncertain. Scisys does make 45% of its business outside the UK, mostly in mainland Europe, but there are risks here too, and so it is hedging to protect its euro earnings from significant deterioration in the exchange rate. Scisys is now also considering acquisitions to fuel growth. Organic growth will be harder to come by in this current market.
