Northgate boosts annual sales

Northgate lifted sales in the second half of the year

Renewed spending in the public sector and human resources division has lifted annual sales at Northgate Information Solutions by six per cent to more than £350m.

The company says its acquisition of the Belgian business process outsourcing provider Arinso in the second half of last year also boosted performance, making it a £500m company, which expects to make more acquisitions throughout the year.

Northgate has signed six contracts worth more than £1m each for long-term outsourcing in human resources (HR) while demand for voting and housing software also rose.

‘We saw acceleration in revenue growth in the second half of the year in all parts of the group, driven by a strong performance in the HR and public services division,’ said chief executive Chris Stone.

‘The momentum in order intake that we saw in the second half of last year has continued into the beginning of this year, which has given us confidence in the full year outlook.’

But the big news remains the acquisition of Arinso and its continued expansions plans, says Ovum analyst John O’Brien.

‘Northgate anticipates several relatively small bolt-on acquisitions internationally that it can now plug into the newly acquired global business process outsourcing capability,’ he said. ‘But it needs to be careful that it does not overstretch itself.’

The full year results were much better than in previous years, he says, when Northgate has struggled to generate healthy organic growth. This year, it rose by 7.7 per cent.

‘The growth drivers clearly continue to be managed services and HR, which both include commercial and public sector clients,’ said O’Brien. ‘In fact there continues to be strong demand for managed services in the education sector.

‘Here Northgate announced new deals with Leicester Council for a £27m Building Schools for the Future contract and a £15m extension to its Northern Ireland schools programme.’