Parexel profits perky in Q1

Operating profit climbed to $16.5m (€11.4m), an improvement of 46 per cent, on last year's comparable quarter, with a similar gain in pre-tax profit to $16.1m. Revenue rose by 26 per cent, although direct and selling, general and administrative costs rose almost as much, by 23 per cent. The firm's contract service business includes the Clinical Research Services (CRS) business, which represents the biggest chunk of the company's services operations, generated $159.3m in the period, a 33 per cent jump from the year-ago quarter. Margins, however, remained fairly flat, as was the case across all business segments. Revenues in the company's consulting and medical communications (PCMS) segment also remained flat at $30.5m. The PCMS unit has been the poor performer of Parexel in the past few quarters and the company has been taking steps to turn things around, including redundancies in order to cut costs. Meanwhile, the Perceptive Informatics unit performed well, with an 18 per cent rise in revenue to $18.2m. During the quarter, Parexel also purchased a clinical research organisation (CRO) in Taiwan to the tune of $51m, as a means to exert its presence in this industry's budding Asia-Pacific region. At the same time, working capitol almost halved to $76.0m, down from $140.6m in the comparable 2006 quarter.