February 15, 2018 / 8:39 AM / 2 years ago

REFILE-UPDATE 1-"Solid growth" in N.America helps Capgemini top forecasts

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Feb 15 (Reuters) - French IT services group Capgemini said solid growth in North America, its biggest market, had offset softening demand in Britain as it reported fourth quarter organic revenue growth above market forecasts.

“We deliver on our main challenge of the year, bringing back North America to solid growth,” Capgemini said on Thursday after reporting 12.3 percent growth in North America.

Fourth quarter revenue rose 5.6 percent on an organic basis, beating the 3.8 percent expected by analysts in a Reuters poll.

“Capgemini closes the year with a strong topline despite UK weakness. The 2018 guidance looks net positive,” Morgan Stanley analysts wrote in a note following the results.

Capgemini said it expects revenue growth of 6 to 7 percent at constant exchange rates in 2018.

Its 2017 revenue rose four percent at constant currencies to 12.79 billion euros ($16 billion), mainly driven by a 24 percent rise in Digital and Cloud revenues.

Capgemini’s operating margin for 2017 stood at 1.49 billion euros or 11.7 percent of revenues in 2017, slightly below analysts’ estimate of 1.51 billion euros.

Capgemini pointed to a business slowdown in the second half of the year in Britain and Ireland “with notably longer client decision cycles”. Revenues in these countries dropped 9.6 percent.

The group also proposed a dividend increase of 10 percent to 1.70 euros per share.

Shares in the company rose 2.8 percent to 104.9 euros at 0829 GMT. ($1 = 0.8021 euros) (Reporting by Silvia Recchimuzzi and Thyagaraju Adinarayan in Gdynia; Editing by Stephen Coates and Alexander Smith)

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