After a long period in the doldrums, the former ICL finally had some good news this month, posting its first profit for five years. Now called Fujitsu Services, the IT services company made a £30.5m pre-tax profit for 2002-3, according to preliminary numbers.

The profit was the result of a series of changes made over the past two and a half years. During that period the firm has changed its name, assembled a new management team headed by Richard Christou, and sold businesses deemed "non-core", including eastern European operations and online education service Knowledge Pool.

The turnaround is all the more remarkable given the troubled situation Christou inherited when, in December 2000, he took over a company losing money, laying off staff and forced to scrap its plans to float.

How did Christou do it? He specifies a focus on a smaller number of activities and territories. "Narrowing down what it is we do [was crucial]," he says. "[We have focused on] keeping the lights on and virtuous-circle IT transformation. We're concentrating on western Europe - that's where the big markets are. I'd be satisfied if we grew our European presence substantially. I don't have any plans to look outside the European market. It's terribly easy to let this go to your head and do all sorts of things. [Operating in] 43 countries doesn't work."

He also notes some key changes that have made interaction between Fujitsu and customers - and even within Fujitsu itself - a less convoluted affair.

"We had lost our way," he says. "It's much more customer-focused now. You have one point of contact. We don't have divisions that inter-trade, and our offerings are standardised. It's a simple organisation. It was clear to me that we had to restructure and I was more pessimistic about the market than many public companies were."

And there will be no revisiting the idea of floating the company. "We were caught by the receding wave [of high valuations on technology firms]," says Christou. "The time was not right."

Christou says his firm is neutral about IT platforms, even though ICL made a massive move to support Windows server technologies in 1998 when it announced plans to train thousands of staff in Microsoft skills. "To say we pushed ourselves away from a Unix view to a Microsoft view is a mistake," he insists. "These are all powerful systems and we work with them all."

Fujitsu's ICL heritage has ensured that it maintains a large stake in UK public sector accounts - one of the very few areas that have not been hit hard by budget cutbacks.

However, the company may now put a growing emphasis on its private sector business. "It's true we have a large share in the public sector and it's a good place to be; the government wants to invest and we want to help them," Christou says. "I think the private sector has been harder hit [but] I'd like to balance the business more now we're back to profitability."

And Fujitsu will not shy away from mega-deals, despite EDS and other firms warning about potential problems of slow payback. "I like large deals," Christou says. "Properly looked after, they're better than small deals because the cost of sale is similar. It's a bit like when I used to buy companies. The same problems occur if you buy a company for £1m as for £100m."

If Fujitsu's progress is a little plodding, Christou does not mind, happily citing analyst Richard Holway's dictum that "boring" companies with repeated profitability operating in unglamorous fields are most likely to succeed in today's IT services business.

"We can't look too far out into the future," he says. "We must [be profitable] again. We have to deliver all the time. It's about the service ethos. It's Holway's famous statement about being boring."

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