Detica - a game of two halves

The opening couple of paragraphs in Detica's announcement of full year results to 31st March 08 give a pretty good indication of the 'two-speed' performance at Detica - and onwards to the industry as a whole

CEO Tom Black said "We are pleased to announce another set of good results for Detica. Group revenue increased by 30% to £203.2 million, driven by organic growth of 8% and the full year impact of prior year acquisitions. Adjusted Group profit before tax increased by 47% to £25.4 million and adjusted diluted earnings per share increased by 36% to 14.6 pence. Overall, the Board is of the view that the performance was satisfactory and demonstrates the ability of the business to achieve good results, even in difficult years.

Our Government business delivered an excellent performance with revenues growing by 43% to £124.1 million but the performance of our Commercial business was mixed with challenging market conditions in the Financial Services sector impacting growth."

Or, to put it more dramatically, Detica's UK Government business grew by 20% whereas revenues from Investment Banking declined by 22% in H2, with the US particularly badly hit. "The Investment Banking sub-sector is expected to remain subdued for at least the next 12 months".

Security is Detica's strength - and a current hot market sector globally. It is involved in a wide range of 'security-type" activities - in the UK on eborders and Met Police, in the US with Homeland Security and other agencies, in the Retail Banking with systems designed to detect and prevent fraud and misconduct. Indeed Detica's security activities are actually bouyed by turbulence in the Financial Services sector.

I've been a strong supporter of Detica - and Tom Black in particular - for many, many years. Indeed they came within a whisker of getting a coveted Holway Boring Award a couple of years back. In a way, it a testimony to any firm if they have such a balanced business that dire market conditions in one do not bring down the whole house of cards.

It's also a sign of 'the man' that Tom Black has taken over direct responsibility for the non Govt/Commercial bits of the Detica business in the UK and US. If anyone can sort them, Black can! This leaves the current COO, Colin Evans, focused solely on our Government business in both the UK and the US.