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Surge in Profits Driven by AI and Hybrid Cloud Services
IBM’s UK division reported a significant profit increase of over £100 million for 2023, reaching £172.9 million, up from £70.4 million the previous year. This surge was driven by strong demand for the company’s AI and hybrid cloud services.
Revenue Insights
Despite the profit boost, the company’s revenue in the UK saw a slight decrease from £3.1 billion to £3 billion. Revenue from core business units grew by 4.2%, but export revenue fell by 27.4% due to changes in IBM’s group research and development activities.
Revenue from consulting increased from £1.3 billion to £1.4 billion. However, software and cloud solutions revenue dropped from £763.6 million to £663.7 million, while infrastructure sales decreased from £410.3 million to £380.7 million.
Profit Margin and Internal Developments
IBM UK saw its gross profit margin rise from 6.9% to 10% year-on-year. This improvement was attributed to a greater focus on high-value consulting and software offerings, as well as enhanced internal processes through AI and digital transformation.
The increase in pre-tax profit was also influenced by positive changes in interest income. A dividend of £198 million was approved for 2023, up from £150 million in 2022.
Employment and Future Outlook
The average number of employees at IBM UK decreased from 7,660 to 7,309 over the year. The company highlighted significant progress in becoming a more innovative and focused organization, particularly in hybrid cloud and AI technologies.
Looking ahead, IBM UK aims to continue advancing its hybrid cloud and AI strategies. The company plans to co-create with clients and partners to drive digital transformations and capture new market opportunities.
Broader IBM Group Performance
Globally, IBM reported a revenue of $61.9 billion (£52.1 billion) for 2023, reflecting a 3% increase on a constant currency basis. Revenue from software and consulting grew by 5%, while infrastructure revenue declined by the same percentage.
