Capgemini reports profit hike, but share price falls
French computer consultancy Capgemini on Thursday reported a more than 25-percent gain in net profit in the first half of 2011, but steep drop in cash on hand.
In midday trading in Paris, the company's share price fell by 6.69 percent in a market falling by 1.28 percent.
For the first six months of the year, Capgemini reported net profit of 127 million euros ($181 million), a 25.7-percent increase from the same period last year.
Sales rose to 4.7 billion euros in the period, a 12.9-percent increase from last year, the firm said.
The company said however that liquid assets on June 30 had dropped by 640 million euros in a year, largely due to its acquisitions.
"Our cash spending appeared rather suddenly, but it is mainly do to acquisitions and financing our growth," Chief Executive Paul Hermelin said in a conference call.
Capgemini acquired Brazilian firm CPM Braxis in late 2010 and said about a third of sales growth was from the added business.
"The good growth in revenues during the first half of the year is the fruit of solid organic growth combined with a specifically targeted acquisition strategy," Hermelin said.
"In this context, we stepped up our recruitment of young employees and increased our headcount by nearly 5,600 employees," he said.
In the first half, the company's operating margin was 6.1 percent against 5.8 percent last year, while its operating profit increased 20 percent to 240 million euros.
© 2011 AFP