Robin Speakman

Shore Capital analyst Robin Speakman is telling clients a loss for 2007 is a possibility, given operational gearing.

Robin Speakman

"We believe that a new management team, or a new owner, could move the business away from reputational issues and reinvigorate the longterm prospects in a still healthy public sector market," said analyst, Robin Speakman.

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Shore Capital - Robin Speakman

According to analyst Robin Speakman at broker ING Barings Charterhouse, recent statements from banks showed a clear trend towards outsourcing their heavily IT-dependent back-office functions.

He thinks that the trend is the start of a "much longer-term growth path", which is good news for those tech stocks with the relevant exposure.

Speakman highlighted insurance software group Innovation Group and systems integrator Xansa as particular winners, because of their outsourcing operations with UK and international financials.

Both HBOS and Royal Bank of Scotland have prioritised IT investment as part of ongoing restructuring and integration plans.Alliance & Leicester and Standard Chartered have referred to the importance of ongoing IT spend, while Barclays will continue its programme of increasing strategic investment, up 15% in 2002, which includes IT.

Insurers such as Royal & SunAlliance and CGNU have also said they will invest in IT in the hope of reducing costs inherent in the claims process.

The latter is particularly good news for Innovation, which has key skills in outsourcing and counts more than 300 insurers as clients.Recent first-quarter results showed strong revenue growth thanks to an acquisition binge, but cash-flow was again hit by related costs.
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But Speakman said the winners would be those offering tailored solutions via deals with partner companies.For example, Innovation has high-profile partner IBM on board.

He emphasised that, while those IT stocks exposed to financials have a relatively bright outlook, investors should remain cautious about stocks without similar exposure.

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\"(Capita\'s) results look to be strong to us and appear well ahead of our expectations,\" said Robin Speakman, a technology analyst at Shore Capital.

Robin Speakman, an analyst at Shore Capital, says: "This means the dispute is out of the way and paves the way for a rights issue.