FDM profit rises as Mountie operation expands

FDM Group posted a 12% increase in first-half profit as the company invested in expanding its more profitable "Mountie" IT consultancy operation.

The IT services and recruitment company’s pre-tax profit for the six months to the end of June rose to £23m from £20.6m as revenue edged up 1% to £117.8m.

Revenue from FDM’s Mountie programme, which supplies banks and other companies with direct IT support, rose 14% to £114.6m.

FDM employs freelance contractors and a growing army of its own consultants, known as Mounties, who are loaned out to clients. It is shifting its business away from supplying contractors to focus on more profitable Mountie services.

The FTSE 250 company said group revenue barely rose because of a planned reduction in contractor revenue. As a result the gross margin rose to 49% from 43%.

The number of Mounties at client sites at the end of the period rose 16% to 3,416 and the group won 38 new clients, two-thirds of which were outside the financial services sector. The company operates in the UK and Ireland with a growing business in North America, Europe and Asia Pacific.

Rod Flavell, FDM’s chief executive, said: "The first six months of 2018 have seen us continue to focus on investment to increase the geographic diversity and capacity of our business...The board anticipates that the group's results for the year will be in line with its expectations and that we will continue to deliver for all of our stakeholders."

The interim dividend increased 21% to 14.5p a share.