Skillsgroup PLC - Trading Update etc

RNS No 3636u
SKILLSGROUP PLC
1 October 1999

                              
                       Skillsgroup plc
Update on Trading, Acquisition of GA Information Systems and
             Management Buy-Out of Synergica AB
 
 
Skillsgroup,  the  IT  services and solutions  company,  has
announced an update on current year trading, the acquisition
for  #11.0  million  of GA Information Systems  ("GAIS"),  a
market  leader  in  the  provision of business  intelligence
solutions  and  the management buy-out of its small  Swedish
business, Synergica AB.
 
Trading Update
 
Like  many  in  our  market sector, the Group's  short  term
performance is being affected as a result of a number of its
major  customers formally announcing extended and  extensive
year  2000  lock  down periods.  This has been  particularly
acute  over  the  last  month  and  following  a  review  of
September  trading, the Group now expects  the  period  from
September  1999 to January 2000, which includes  the  highly
profitable  fourth  quarter (to 30  November  1999),  to  be
adversely  affected  by  a  more  significant  deferment  of
projects  and  reduction of discretionary  spending  by  its
major  customers than was previously anticipated.  The Board
believes  this  is as a result of customer  uncertainty  and
will not impact on the Group's market position.  As a result
of  this  environment  we  now expect  approximately  25-30%
earnings  growth from continuing businesses  (including  all
acquisitions)  in the financial year 1999 compared  to  1998
against earlier expectations of 45-50%.
 
Despite  this  short  term uncertainty, we are continuing to
drive   the  business  forward  as  illustrated  by  today's
announcement of the acquisition of GAIS.
 
Acquisition of GA Information Systems
 
The addition of GAIS to the existing portfolio of businesses
within  Acuma,  the  Group's enterprise solutions  division,
will establish it as the clear leader in the non-proprietary
business  intelligence  market  in  the  UK.   The   Group's
existing  business intelligence operation, based around  ISL
which  was  acquired in 1998, is the market leader  for  the
Cognos  software  set  and is focussed  mainly  on  the  SME
market.  GAIS  is  the market leader in the  BusinessObjects
software set and is focussed on the larger corporate market.
 
Established in 1995, GAIS is based in Stockport  and  London
and has enjoyed rapid growth.  Its customer base includes  a
large  number  of  blue chip organisations  in  the  retail,
financial, airline and telecommunications sectors.  Turnover
and  profit  before  tax in its last financial  year  to  31
December   1998   were  #5.2  million   and   #0.7   million
respectively  with net assets at that date of #0.2  million.
Guy  Colclough, the founder and Chief Executive of GAIS will
take up a key position within Acuma relating to the delivery
of  enterprise solutions especially with regard to  business
intelligence products.
 
The consideration for the acquisition initially consists  of
#7.9 million - #3.6 million in cash and #4.3 million in loan
notes - with a deferred consideration total of  #3.1 million
divided  approximately equally between cash, loan notes  and
Skillsgroup  plc  shares payable after two and  three  years
dependent on the continuing employment of key staff.
 
Intended Management Buy-Out of Synergica AB
 
The  Group has also reached agreement in principle  for  the
sale  to  its management for SEK1 million (#0.1 million)  of
its Synergica AB subsidiary, based in Sweden which currently
forms   a   small  part  of  Acuma's  knowledge   management
activities.  The turnover of Synergica AB was SEK17  million
(#1.3  million) in the year ended 30 November  1998  and  it
produced  an operating loss of #0.2 million.  After  related
inter-company debt write-offs, the disposal is  expected  to
show a breakeven position.
 
Claes  Hofmann, the managing director of Synergica AB,  will
resign  from the Skillsgroup plc board in order to lead  the
management team buying the business.
 
For further information, please contact:
 
Skillsgroup plc                                 01625 591200
David Southworth
www.skillsgroup.co.uk
Colin Gibson
 
Ludgate Communications Limited                 0171 253 2252
Reg Hoare
Edward Macquisten
 
END

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