Activity type factsheet 2024/25: Information Technology Services
Published 18 March 2024
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This publication is available at https://www.gov.uk/government/publications/2024-contract-profit-rate-assessment/activity-type-factsheet-202425-information-technology-services
Information Technology Services
Under the Defence Reform Act 2014, the SSRO must provide the Secretary of State with its assessment of the appropriate rates used to determine the contract profit rate for pricing qualifying defence contracts and qualifying sub-contracts. Part of the methodology is the categorisation of comparator companies into five activity types.
- Develop and Make
- Provide and Maintain
- Ancillary Services
- Construction
- Information Technology Services
The results of these groups are separately analysed and this fact sheet describes the Information Technology Services group results.
The baseline profit rate combines results from “Develop and Make” and “Provide and Maintain”, as set out in the Recommendation Factsheet. For further information on the methodology used to calculate these rates please see the Single Source baseline profit rate and capital servicing rates methodology.
Information Technology Services
Companies undertaking comparable activities considered as ‘information technology services’ are expected to engage in the development, or operation and maintenance, of bespoke and complex IT systems; or the integration of off-the-shelf components or software to deliver a bespoke IT system/service. This could cover a broad range of IT management and consultancy services and IT system, software or application development. In addition, comparable companies may also provide the hardware for IT systems or networks, or the training necessary to operate or maintain them.
Profit on cost of production
| 2020/21 | 2021/22 | 2022/23 | 2023/24* | 2024/2 | |
|---|---|---|---|---|---|
| Underlying rate (unadjusted for capital servicing) | 11.01% | 10.65% | 11.26% | 11.31% | 11.02% |
| Capital servicing adjustment | -0.07% | -0.03% | -0.35% | -0.11% | -0.51% |
| Underlying rate | 10.94% | 10.62% | 10.91% | 11.20% | 10.51% |
| Rolling average** | 10.51% | 10.61% | 10.92% | 10.78% |
Note: The capital servicing adjustment accounts, at an aggregate level, for different levels of capital employed across the companies in the index and so sets a baseline upon which step 6 of the contract profit rate applies.
‘*‘This was the first assessment year for this activity group. The ITS rates for 2020/21 to 2022/23 are the historical profits of the 2023/24 comparator group, as the SSRO’s methodology did not include an ITS comparator group prior to this year. All other activity type factsheets represent the profit data of the groups that were assessed in that particular year.
**A three-year average was used for 2024/25, 2023/24, 2022/23, & 2021/22
Data sources
For further information on the data selection approach please see section 7 of the Single Source baseline profit rate, capital servicing rates and funding adjustment methodology. A company update search of the Orbis database was carried out on 1 November 2023 on data update number 342001 using software version 342. The financial data for the calculation was extracted from Orbis at the same time.
Median capital servicing adjusted return on cost of production
Proportion of Companies by country
Proportion of companies with defence keyword
Supplementary statistics
| Number of companies | 38 |
| of which profit making | 36 |
| Aggregate turnover (£billions) | £107 |
| Total capital employed (CE) (£billions) | £0.7 |
| Average company CP:CE ratio | 127.28 |
Source: Orbis (Cash figures shown in rounded GBP Billions)
Names of companies in the index
| Accenture Public Limited Company |
| Adesso SE |
| Akamai Technologies INC |
| Allgeier SE |
| American Software INC |
| Ansys INC |
| Atos SE * (J) |
| Aubay |
| Bjss Limited |
| Bouvet ASA |
| Cancom SE |
| Ciena Corp |
| Combinedx AB |
| Digia OYJ |
| DXC Technology Company * |
| Gofore OYJ |
| Infotel |
| IT Link |
| Kainos Group PLC |
| Leidos Holdings, Inc. (J) |
| Manhattan Associates INC |
| Mensch UND Maschine Software SE |
| Mnemonic AS |
| Performance Technologies S.A |
| Proact IT Group AB |
| Progress Software Corp |
| Prosource.It (UK) Ltd. |
| PSI Software SE |
| Science Applications International Corp (J) |
| Siili Solutions OYJ |
| Sistemas Avanzados de Tecnologia, SA |
| Sopra Steria Group SA |
| Sword Group SE |
| THE Descartes Systems Group INC |
| Tracsis PLC |
| TXT E-Solutions S.P.A. |
| Vmware, Inc. |
| Zebra Technologies Corp (J) |
‘*’ Indicates that the company is a loss-maker in the year.
(J) Indicates a company which was not in the activity group last year, but has been added this year.