CSC returns to profit one year after NHS debacle

IT services supplier CSC raised sales 3% and recorded $268m profits one year after it suffered a $1.5bn charge for its failed NHS contract

IT services supplier CSC increased its sales by almost 3% in its latest financial quarter and recorded a profit $268m a year after it suffered a $1.5bn charge related to its failed contract with the NHS.

Sales in CSC’s third quarter were worth $3.78bn compared with $3.69 in the same period the year before.

CSC wrote off the entire $1.5bn it had invested in the troubled National Programme for IT (NPfIT), which was dismantled at the end of 2011. CSC’s contract to provide electronic patient records systems was troubled by a series of missed milestones.

CSC has also struggled to make money on a ten year contract with Royal Mail.

The company’s CEO Mike Lawrie said the results show the company’s recovery is going to plan. 

“We are transitioning to our new operating model and we are aligning our assets with our strategy of leading the next generation of technology services and solutions,” said Lawrie.

He said a cost-cutting operation had the desired effect of increasing profits, adding that the CSC also raised cash through selling assets.

CSC’s managed services business made sales worth $1.62bn, 3% less than the quarter one year before. The division won $1.4bn new business during the quarter.

The business solutions & services (BSS) business reported sales of $850m, representing a 28.7% increase over the same period a year ago.

The supplier’s North American public sector business was worth $1.34bn.

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