It looks like it was a case of ‘steady as she goes’ in H1/Q2 (to end June) for Swedish ERP vendor, IFS Group. After taking account of the strength of the Swedish krona relative to other major currencies, currency adjusted growth rates in H2 appeared solid: net revenue was up 7% to SKr1,235 million, license revenue was up 8%, maintenance revenue up 5% and consulting revenue up 5%.
The companies geographic spread appears to have helped maintain growth levels with the developing countries performing more strongly than more advanced economies. The company is also benefiting from its focus on a number of high growth segments such as renewable energy, oil and gas, infrastructure, homeland security and defense. However, it is unclear how the company performed on an organic basis.
The company’s progress on the acquisition front is interesting. The company stated in February that it was ready to up the pace of acquisitions in 2011 (see IFS ready for more acquisitions). It has already made three complementary acquisitions since announcing its plans. However, IFS believes that recent transactions in the software industry have been at very high multiples; levels which wouldn’t necessarily provide a satisfactory return for shareholders. The company is therefore warning that should price expectations remain high it will undertake fewer acquisitions than previously anticipated. As a result there is a question mark over its ability to achieve the target of 15% EBIT margin by 2013 (set in 2008).