After issuing a profit warning for FY13 in June (see here), mid-tier IT services provider Sopra unsurprisingly delivered a drop in first half profit.
Operating profit from recurring operations fell 13% to €41.3m – pushing Sopra’s group margin down to 6.2% from 8.1% last time. Headline revenue was however up 12.1% to €661m, thanks in large part to the acquisition of Madrid-based HR Access in February (see here). Organic growth for the period was 4.9%. However there are signs that organic growth is on the up, reaching 7.3% in Q2.
Looking at the sub-scale UK operation, Sopra said its performance had stabilised. H113 UK revenue was up 1.9% to €42.3m on a pro forma basis. This compares to a 3% decline in H112 (see Sopra suffers ill winds in UK waters). The UK operating margin meanwhile dipped to 7.8% from 8.2% last time.
Sopra confirmed its FY13 organic growth target of between 2% and 5% - which looks achievable at current course and speed. Profitability is another matter. Sopra is nursing an unprofitable acquisition in HR Access - the company made a €3.7m loss in H1 (a negative 22% margin). And yet, Sopra expects its FY13 group operating margin on business activity to be between 7.3% and 7.7%. Sopra will have to embark on some cost cutting in H2 if it is to achieve that objective.