Morse splits into two separate businesses

Pan-European integrator Morse has split into two separate businesses as it continues its transition into a services-focused firm.

The integrator will now operate as two entities: Morse, which is its core business of an advisory and execution professional services company; and Monitise, a secure mobile banking applications provider.

Morse has been touting its services push for more than a year, after admitting that its infrastructure business was flagging (CRN, 18 April 2005).

The move comes in the wake of Morse’s 2006 financial results, which saw the firm’s turnover slump by four per cent to £297m, from the £309.3m reported in 2005. However, Morse’s profit rose by 34 per cent from £5.5m in 2005, to £7.4m in 2006.

Morse claimed its growth in profit was because its services revenues have risen by 14 per cent from 2005. It also claimed 66 per cent of its gross profit is now generated from services.

Richard Lapthorne, chairman of Morse, said in a statement: “In parallel with managing the steps required to reposition Morse from a pure reseller to an advisory and execution professional services company, we have leveraged our intellectual property resulting in our secure mobile banking applications business, Monitise.”

Lapthorne said both Morse and Monitise have different characteristics and it is appropriate that each operates separately under the Morse Group umbrella.

Kate Hanaghan, analyst at Ovum, said: “Dividing the business in two is quite a bold move by Morse. It could help with its rebrand to becoming a more services-focused firm.

“However, some customers look at Morse and think of it purely as a reseller. Morse must clarify the range of services it offers with customers. It is no longer ‘just’ a reseller, and it needs to shout about that.”

>> Further reading:

Morse offloads loss-making units

Morse 'on track' with its shift towards services