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CGI sees profits surge by more than a third amid new IT and consulting bookings

·3 min read

MONTREAL — CGI Inc. said new bookings were the driving force behind a 37 per cent profit increase last quarter, as continued need for IT services in the COVID-19 pandemic boosted revenue.

The Montreal-based technology and business consulting firm enjoyed bookings of $2.92 billion in its fourth quarter, nearly one-third of that amount from new business versus 22 per cent in the same period last year, said chief financial officer François Boulanger.

"Even as clients continue to reprioritize their IT investments in line with the changing public health and economic environment, we remain well-positioned as a partner of choice to help governments address a wide range of domestic priorities, including infrastructure, environment, and the climate, and cybersecurity," CEO George Schindler told investors on a conference call Wednesday.

Despite the strong year-over-year figures for new contracts, overall bookings paled compared to broader market performance, said TD Securities analyst Daniel Chan.

"Bookings are always lumpy in general, which is why we really focus on the trailing 12 (months)," Schindler said.

"We're not too fussed about any one quarter. But certainly, we had strong IP bookings, strong consulting bookings and the new business is up," he said.

"Nothing to be too concerned about."

Schindler also brushed off any fears around an extended bout of inflation — the rate rose 4.4 per cent year over year in September, surging to its fastest pace since 2003.

"Obviously, wages are being increased across many different industries," Schindler said.

"We are able to achieve and pass on any wage increases in the rates. And that's not just for new projects; we have those clauses in most of our existing contracts tied to things like consumer price index and inflation rates."

Financial services and insurance bookings rose 20 per cent throughout the year, yielding a book-to-bill ratio of 111 per cent for 2020-21.

Annual communications and utilities bookings jumped 27 per cent year over year with a book-to-bill ratio of 114 per cent as utilities providers sought to address climate risk, Schindler said.

CGI reported a fourth-quarter profit of $345.9 million, up from $251.9 million in the same quarter last year, as its revenue edged higher.

The technology and business consulting firm said the profit amounted to $1.39 per diluted share for the quarter ended Sept. 30, up from 96 cents per share a year earlier.

Revenue totalled $3.01 billion, up from $2.93 billion in the same quarter last year.

Excluding acquisition-related, integration and restructuring costs, CGI said it earned $1.40 per diluted share in its most recent quarter, up from $1.22 per diluted share a year ago.

Analysts on average had expected an adjusted profit of $1.35 per share, according to estimates compiled by financial markets data firm Refinitiv.

This report by The Canadian Press was first published Nov. 10, 2021.

Companies in this story: (TSX:GIB.A)

Christopher Reynolds, The Canadian Press

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