Northgate Information Solutions enjoys profit increase due to Arinso acquisition

Northgate Information Solutions reported a 23% rise in half-year operating profit, aided by its acquisition of human resource services provider Arinso.

The UK software group, which makes software for the public services and HR markets, recorded operating profit of £31.5m in the six months to 31 October.

Its HR division saw a 7.5% increase through organic revenues, having signed contracts worth £120m in the first half, including a seven-year contract with Cadbury Schweppes to supply HR systems.

In September, Northgate bought Belgian outsourcer Arinso International for £257m to expand its HR business outside the UK. Northgate now operates in 46 countries.

“During the half-year, all three of our divisions delivered organic growth, strong cash flow, and strong order intake,” chief executive Chris Stone said in a statement.

“The acquisition of Arinso is proving to be even more promising than we had envisaged it has enabled the HR division to win a number of significant long-term contracts and accelerated the evolution of our business from a software and services supplier into a true global outsourcing group.

“In terms of outsourcing, HR stands today where the IT industry was 15 years ago. The opportunities for growth are substantial and we now have the breadth and scale to capitalise on them,” he said.

Northgate IS said it expects to meet full-year expectations, with organic growth accelerating in the second half, driven by its HR unit.

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