Services company CMG is riding on the crest of the IT services boom, judging by its 1997 results, with only the skills shortage a possible brake on its growth.
The company announced pre-tax profit of #38.6 million, a 40 per cent increase on last year, on turnover of #303 million. Its net profit rose 44 per cent to #24.7 million and its earnings per share were up 41 per cent to 38.6p. CMG also announced a one-for-one bonus issue "in order to improve the marketability" of its shares.
The company?s largest market is in the Netherlands, where it generated #207.9 million turnover, a 21 per cent rise. But UK turnover grew at a faster rate, up 34 per cent to #72 million, while the German operation rose from a #1.2 million loss to make a #1.1 million operating profit.
Not all of this was down to organic growth however. CMG?s improvement in Germany was partly due to its acquisition of Orga-team. It also made acquisitions in the UK and Belgium last year and has continued the trend this calendar year, acquiring a French SAP consultancy, Alias SA, and Microlex, a Derby based software and services company, which is strong in the life assurance and pensions markets.
Chairman Cor Stutterheim attributed the strong performance and increase in market share to buoyant market conditions and a 41 per cent increase in staffing.
But the need to recruit more staff may also be a negative factor, given the skills shortage across the industry. Chief executive Tom Rusting admitted that the company has reached its project limit, with all staff currently being used. Skills are particularly scarce in the area of millennium compliance, Emu conversion and implementation of ERP systems.
"The skills shortage in the industry will continue over the next few years," added Stutterheim.
Rusting added: "We have had to turn down clients. In order to continue to growing this year we will need to continue the rate of recruitment."
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