ERP provider IFS this week reported results for what it called a “quiet quarter,” with license sales well off their pace of a year ago even as healthy cash reserves boosted the company’s acquisition prospects.
Sweden-based IFS reported revenue of SKr 589 million in the period ended March 31, down 7% year over year from SKr 634 million. The company blamed a resurgent Swedish krona for 5% of that decline. Software license revenue sank 12% to SKr 65 million, while consulting revenue fell off nearly as much, dropping 10% to SKr 322 million. The lone bright spot among the revenue lines was maintenance and support revenue, which nosed up 2% to SKr 199 million.
The shortfalls impacted the bottom line, driving down earnings before interest and taxes (EBIT) to SKr 8 million, off from SKr 30 million in the year-earlier quarter. But officials expressed optimism that the company’s improved net liquidity (SKr 326 million versus SKr 256 million in Q1 of 2009) would set the stage for some shopping.
On a conference call Wednesday to discuss the results, CEO Alastair Sorbie said that given IFS’ cash position, “we would expect to see acquisitions in 2010.” He did not specify what rationale might guide the M&A activity.