French firm Sopra Steria’s is not that happy with its UK arm which has posted a year-on-year decline in revenues and profits.
The IT services outfit should have been happy, as the rest of its books were positive. Revenues for the year reached €3.85 billion – a 2.8 percent year-on-year increase – while operating profits grew by nine per cent to €261.7 million representing 6.8 percent of total sales, up from 6.4 percent in 2016.
The firm’s domestic French sales grew by 4.5 per cent to €1.6 billion, while profits grew by eight per cent to €111.2 million. Its “other European” entities – which encompasses the Nordics, Switzerland, Germany, Benelux and Italy – enjoyed a 12 percent increase in sales to €827.6 million, with each country achieving at least 10 percent growth.
However in the UK revenues fell by 13.6 percent year on year to €801.7 million, while operating profit plummeted by 38 percent to €36.9 million.
Sopra Steria claims that its joint venture with the UK Cabinet Office – a contract drawn up in 2013 worth €1 billion over ten years – is going through a “transition phase” which is expected to continue into the first six months of 2018.
The IT services firm claims that longer decision-making cycles and a “wait-and-see attitude” from UK customers during the second half of last year affected UK sales.
Sopra Steria launched a plan last year to turn around its UK performance which will see the firm expand its private sector customer base and invest in its consulting business and sales team.
The firm plans to implement a cost-cutting programme to shave around €20 million from 2018 UK outgoings.
