Axon Claims SAP Services Leadership

by Nick Mayes

SAP services specialist Axon Group has reported strong growth for the first half of the year, driven by its recent expansion in North America.

Chief executive Steve Cardell said Axon is now the largest consulting firm in the world focused on the $24bn SAP services market. He said that while its share of that total is only 1% to 2%, it expects to increase his through ramping up its US operations and its offshore delivery capabilities in the Asia Pacific region.

In the six months ended June 30, 2007, the company increased net profit to 8.4m pounds ($16.9m) from 3.6m pounds ($7.2m) in the year-ago period, on revenue that rose 56% to 96.7m pounds ($194m). Axons operating profit margin climbed to 16.6%, from 14.2%.

The UK-based operation has been expanding its North American business through a string of acquisitions in recent years, and the region accounted for 35% of revenue during the first half. Sales in the EMEA region rose 33%, and the company said there was strong demand from the public, utilities, oil, and gas sectors.

Axon added 150 SAP consultants in China, Malaysia, and Singapore in March 2007 when it agreed a 9.1m-pound ($18.3m) takeover for local services firm JSPC-i. It is also recruiting aggressively and it increased its headcount by 36% to 1,277 in the first six months of the year.

The company makes the majority of its sales from a relatively small number of clients. Its top five customers accounted for 54% of first-half sales.

After the results announcement, Axons shares rose by more than 5% to 794p in trading on the London stock exchange, giving it a market capitalization of 467m pounds ($939m).