MONTREAL — CGI Inc. beat expectations as it reported profit growth of seven per cent year over year in its first quarter, driven by ongoing demand for digital services amid the COVID-19 pandemic.
The technology and business consulting firm reeled in $3.6 billion in bookings, marking a book-to-bill ratio of 116.5 per cent for the quarter ended Dec. 31.
With rapidly rising inflation through the quarter, CEO George Schindler said wage inflation is "already built into our contract."
"Having said that, as we come out of the the lockdowns, for all the right reasons we expect some of our expenses to go up as we continue to drive organic growth with our clients and and be in proximity with them," he told investors on a conference call Tuesday.
But Schindler said a renewed focus on higher-yielding intellectual property-related business and "some underperforming geographies" will make up the difference.
Solid bookings in Scandinavia, the United Kingdom and Australia buoyed the CGI's book-to-bill ratio. It also signed an eight-year managed services contract with the Finnish government last year, making the company a major provider of hybrid information-technology services to dozens of public-sector organizations.
CGI expanded its workforce by 6,000 employees year-over-year. Its closure of two acquisitions accounted for 30 per cent of the figure: Virginia-based Array Holding Company, a 275-employee digital services provider that works with the Pentagon; and Cognicase Management Consulting (CMC), a Madrid-based tech consultancy with 1,500 workers.
CGI has also announced an agreement to buy Unico, an Australian technology services outfit with its hands in communications, utilities and banking. The deal is pending government approval.
The Montreal-based company reported that net income rose to $367.4 million in its first quarter, up from $343.5 million from the same period last year.
Revenue totalled $3.09 billion, up 2.4 per cent from $3.02 billion.
CIG said profit amounted to $1.49 per diluted share for the quarter ended Dec. 31, up from $1.32 per diluted share in the same quarter a year earlier.
Excluding specific items, CGI said it earned $1.50 per diluted share for its most recent quarter, up from $1.33 per diluted share a year earlier.
Analysts on average had expected an adjusted profit of $1.45 per share, according to financial data firm Refinitiv.
This report by The Canadian Press was first published Feb. 2, 2022.
Companies in this story: (TSX:GIB.A)
Christopher Reynolds, The Canadian Press
