Demand for IBM’s AI and hybrid cloud services helped profit at its UK arm surge by more than £100m in 2023, it has been revealed.
The Portsmouth-headquartered division has reported a pre-tax profit of £172.9m for its latest 12 months, up from £70.4m.
According to newly-filed accounts with Companies House, the firm’s revenue dipped slightly from £3.1bn to £3bn in the year.
IBM’s revenue from its core business units increased by 4.2 per cent but export revenue decreased by 27.4 per cent “due to a change in the organisation of IBM group research and development activities”.
Its revenue from consulting rose from almost £1.3bn to £1.4bn but its software and cloud solutions revenue fell from £763.6m to £663.7m and its infrastructure sales went from £410.3m to £380.7m.
Its gross profit margin increased from 6.9 per cent to 10 per cent year on year as “a result of a greater mix towards high value offerings in consulting and software and by digitally transforming internal processes and scaling AI to enhance productivity within IBM”.
IBM added that the jump in its pre-tax profit was additionally affected to positive movement in interest income.
In 2023 a dividend of £198m was approved, up from £150m in 2022.
During the year the average number of people employed by IBM UK decreased from 7,660 to 7,309.
IBM makes ‘significant progress’
A statement signed off by the board said: “The directors are pleased with the performance of the company given the challenging economic environment.
“In 2023 IBM UK, as part of the IBM group, made significant progress in its journey to become a more innovative and focused company, built around the two most transformational technologies of our time: hybrid cloud and AI.
“The company expanded its ecosystem of partners and enhanced productivity.
“IBM UK continued to address the evolving needs of clients – to help revolutionise customer service, modernise countless lines of code and automate enterprise tasks.”
On its future, IBM UK added: “Technology has proven to be a fundamental source of competitive advantage.
“Continued demand for technology will serve as a major driving force behind global economic and business growth as businesses look to scale, offer better services, drive efficiencies and seize new market opportunities.
“Clients are asking how to boost productivity with AI and how to manage their technology stack, much of which is deployed across a hybrid environment: public, private and on-premise.
“These trends continue to fuel demand for both hybrid cloud and AI.
“In 2024, the company will continue to advance its hybrid cloud and AI strategy.
“IBM will co-create with its clients and ecosystem to realise business value through digital transformations as their trusted innovation partner.”
The wider IBM group reported a revenue of $61.9bn (£52.1bn) for 2023, up three per cent on a constant currency basis.
Software and consulting revenues increased by five per cent while infrastructure revenue fell by the same amount.