Software and services provider SciSys said FY12 EBITDA profits will be in line with expectations, after continuing to see an improving margin performance in the second half of 2012. In H1, SciSys’ operating margin was 6.6%, edging it closer to its 7%+ target (see here). Cash generation meanwhile remained ‘strong’ and SciSys said it has healthy opening order book and new business pipeline for 2013.
SciSys’ government & defence and media broadcast divisions apparently both finished 2012 ‘on a strong footing’ with a number of key contract wins, which bodes well for 2013. The applications management and space divisions performed in-line, however the environment division struggled due to uncertainty in short term orders. The integration of the recent acquisition of German space business MakaluMedia meanwhile (see SciSys strengthens German space business) is going well, although SciSys said it won’t contribute materially to FY12 profits.
SciSys’ decision to lease out space in its Chippenham HQ is clearly benefitting its bottom line, and further tenants have been secured which will contribute rents in 2013. Looking ahead, 2013 looks set to be another challenging year, particularly in the UK public sector. SciSys will continue to look for acquisitions opportunities. But sensibly, chairman Mike Love sees the number one priority being margin growth.