Profits safe in the bank at ComputerLand

IT systems integrator ComputerLand (CL) predicts no significant decrease in its revenue from the key banking and finance sector next year, despite a recent move by its main competitor to shoulder into the lucrative market segment from which CL generates almost half its turnover.
"The bank and finance sector is the most stable sector in our revenue, and fortunately growing," said Michał Danielewski, CL's co-chief executive officer, adding that this year the company expects about 45% of its revenue to come from the segment, a 4% increase over last year. In 2001, CL's revenue was €131.6 million (zł. 537 million), of which contracts in the banking and finance sector accounted for about €54 million (zł. 220 million).
Danielewski said he was sure CL's revenues from its banking and finance sector would remain firm, despite the attempt by lead competitor Prokom Software to compete. In mid-September, Prokom, Poland's largest IT company, signed a preliminary deal with Softbank to increase its 10% stake in the company to 33%, thereby becoming the banking software firm's strategic investor.

Major systems
Prokom expects the move to enable it to grab major IT projects in the banking-finance segment in 2003, especially a major systems contract offered by Softbank's main client, PKO BP. Until now, Prokom, which provides IT systems for institutional clients, including TPSA, PZU and state pensions administrator ZUS, has not targeted the high-margin banking and financial sector.
"In a year or two we are going to test our ability to co-operate with Softbank in the banking sector where strategically we made a decision to start our activity," Mirosław Szturmowicz, a Prokom vice president, told the Business Journal in September.
In a few weeks, PKO BP, the largest retail bank in Poland, is expected to invite bids for a centralised IT system contract worth an estimated €490 million-€613 million (zł. 2 billion-zł. 2.5 billion) over the next five years, according to Marek Paczuski, an IT analyst at the Warsaw office of CA IB. PKO BP has been Softbank's main client for years as well as CL's third largest client in its banking-finance segment. CL's current contract with PKO BP to provide systems application for the bank's headquarters accounts for no more than €12.3 million (zł. 50 million), although Danielewski declined to detail the precise amount.

Biggest chance
But despite Prokom's preliminary deal with Softbank, which has not been finalised, CL still has "the biggest chance in our history" of winning PKO BP's forthcoming contract, Danielewski said. CL however, has not yet added the project to its budget and revenue projections for 2003.
But if CL fails to win the PKO BP contract, it will not see any significant decrease in its banking-finance segment revenue in 2003, Danielewski said.
"Even if another firm wins the centralised system, those projects which CL already delivers to PKO BP will still be ours, but we are in the best position to win the new contract," he said.
In its latest report on CL, however, CA IB said that the Prokom-Softbank team, "due to its in-depth knowledge of PKO BP and PZU," appeared to be the best-positioned bidder in forthcoming tenders for central IT systems organised by the two companies. As the new player in the banking-finance market segment, the Prokom-Softbank duo "may threaten the dominant position of CL and limit to some extent its future revenues from this sector," the report said. CA IB forecasts CL's total revenue to jump to €154 million (zł. 628.3 million) in 2003.
CL has provided IT services to Poland's banking and finance sector for about 13 years. It is one of the firm's six main business sectors along with industry, telecommunications, public administration, health and general business.