Monday, 7 April 2008

Mouchel - the BPO competitor to watch

I have written about Mouchel many times – particularly in the last year when they acquired both HBS and Hedra. As a result, latest results for six months to 31st Jan 08, show strong revenue growth – up 49% at £308m. However their profits were hit by integration costs with operating margins down from 6.9% to 5.9% on a reduced PBT of £9.3m..

In the circumstances, however, these were a pretty good set of results. Organic growth was an impressive 17% and Mouchel reckons that their market can support a 10% pa organic growth rate right now. Indeed, I have no real argument with that. BPO is certainly the place to be right now.

My ex-colleague John O’Brien at Ovum said that “Mouchel is transforming itself into a support and IT services hybrid along the lines of Serco, which bought ITNET in the UK, and more recently acquired Cornwell Management Consultants. Although Mouchel is a much smaller competitor to Serco the two companies operate in some similar areas within the public sector, across local government, property, transport and education markets. Serco, however, has interests in central government and defence too.”

So it is interesting to note that Mouchel turned to Serco when headhunting its new MD (Steve Morriss) for HBS. The integration of HBS is said to being going well. Maybe they might have more issues with integrating Hedra though. But without doubt for anyone in the UK Support Services/BPO market – particularly in the Public sector – Mouchel is certainly a competitor to watch.

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