Acquisitions push EDP into the red

The loss occurred despite a 12.8% increase in turnover to 5.11m over the same period, and was largely due to losses derived by Disys and BCT, two software businesses which were acquired last year. EDP said during the first half necessary product quality improvements were made at the two subsidiaries, and that the full integration of the companies will be completed in the second half when they are expected to contribute to group profits.

EDP said that as well as the losses from its acquisitions, the results for the period reflect the general reduction in IT expenditure, and added that with the “very tough trading conditions” it is too early to be certain about the year as a whole”. Despite this, however, EDP increased its R&D expenditure by around 21% during the half to 1.1m, which also added pressure to its bottom line.

Not put off by the costs associated with its last acquisitions, EDP, expects the tough climate to also work in its favour by providing cheap acquisition opportunities as smaller rivals continue to struggle.

At the end of March, EDP had 7.95m in the bank.

By 1.30 pm, shares in EDP were down 7.08% to 52.50p.