Cap Gemini says results will be down

The French-based group, which bought Ernst & Young’s consulting arm last year, said it was now looking at the prospect of ‘moderate growth continuation’ or a reduction in global volume of business activity, based on information gathered from clients.

Cap Gemini said the effects of the 11 September attacks in America and a generally depressed business climate had cost the group ‘significant losses in revenue and bookings’, pushing back growth recovery by at least two months.

The group confirmed half year consolidated revenue of Euro 4.44bn (Pounds 2.77bn) published in July, but warned on growth in the second half of 2001.

It said it could not put a figure on revenues for the current fiscal year or budget drafts for 2002, but said a number of precautionary measures were being put in place to should a recession in Europe be confirmed.

These include a squeeze on costs, pruning of operational structures, relocating some production activities and the expansion of developmental centres.

Reports in today’s FT said analysts at some of the City’s biggest banks predicted Cap Gemini to lower profit forecasts and said the company’s exposure to the economy was greater than that of consulting rivals Accenture which released better than expected results yesterday.

Richard Leggett of Goldman Sachs said costs would have to reduced by 5% and predicted further job custs.

In June Cap Gemini cut 2,700 jobs of which 550 were made in its UK operations.


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