8th Mar 2016 10:26
LONDON (Alliance News) - SQS Software Quality Systems AG on Tuesday said its pretax profit edged up in 2015, despite revenue increasing significantly thanks to acquisition contributions.
The specialist supplier of software quality services said revenue for the year ended December 31 was EUR320.7 million, compared to EUR268.5 million in 2014. In 2015, SQS purchased a 90% stake in SQS Italia in Italy, as well as two US-based companies, Trissential LLC and Galmont Consulting LLC.
SQS noted stripping out the effect of the acquisitions, organic revenue growth was 7.5% compared to 2014. At the prior year's exchange rates, organic growth would have been 2.6%, reflecting the strengthening of non-euro currencies during the period.
Revenue in its managed services segment, which makes up almost half of group revenue was EUR153.2 million, up from EUR120.5 million, whilst specialist consultancy services also increased to EUR36.6 million from EUR20.7 million.
However, signs that SQS is moving the focus away from its regular testing services, which took a hit in its half year results, were apparent in the full year figures. Revenue from this segment fell to EUR99.3 million from EUR102.1 million, and the company said it was aiming to reduce the share of this segment to below 30% of total revenue. It currently makes up 31% of total revenue.
However, the overall growth in revenue meant pretax profit was slightly up for the year at EUR10.3 million, from EUR10.1 million. As such, its full year dividend was EUR0.13 per share, unchanged from 2014.
SQS said the acquisitions made in recent years were indicative of its strategy to move towards higher margin markets, such as the US where SQS's organic growth rate was 35% over 2015.
"We enter 2016 with cautious optimism, and look forward to another year of progress. The US will be a key geography and our recent acquisitions enable us to take full advantage of the opportunities in this high potential market. Our focus over the next six to twelve months is to continue integrating our acquisitions and leverage these to support our growth across our three divisions," said Chief Executive Diederik Vos.
Shares in SQS were up 1.0% at 520.00 pence on Tuesday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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