ISG Continues Recovery with Robust Q2

US-based group Information Services Group (ISG) has announced a 5% increase in revenue (at constant currencies) for the second quarter ended June 30, to $50.5m.

Founded in 2007, the firm first acquired outsourcing advisory firm TPI, then last year added UK-based benchmarking and analytics firm Compass and public sector advisor STA Consulting.

The strengthening dollar negatively impacted revenue by $2.2m so that reported revenue rose only 0.4%. Revenues rose 22% in the Americas to $27.2m, and 24% in Asia Pacific, to $7.1m, off-setting an 18% decline to $16.2m in Europe. Operating income was fairly steady at $2.3m (2011 Q2 $2.5m), while second quarter adjusted EBITDA of $5.4m was down from $6.1m a year earlier. Headcount meanwhile increased by 33 in the quarter to 765, in anticipation of projected demand.

First half 2012 revenues were $96.8m, up 9% at constant currency or 6% on a reported basis; operating income move from a ($2.7m) loss to $2.5m in the black, while adjusted EBITDA was $8.4m, from $4.5m a year earlier.

Growth is well down on figures for the previous quarter, in which revenues were up 15% at constant currencies - however, as the absolute revenue figures show, this was the result of lower comparatives from Q1 of 2011.

Chairman and CEO Michael Connors described the performance as 'pleasing' in the face of 'macroeconomic headwinds in Europe' and reported 'healthy activity' in the group's global sales pipeline. He added: 'A key highlight in the quarter was our Managed Services business, where we signed $8 million in multi-year contracts, recording its best quarterly results since being launched.'

Full-year guidance reaffirms constant currency revenue growth between 6 and 8% and adjusted EBITDA of between 10 and 15%. Web site: www.isg-one.com .