Sema, which is disposing of 80 per cent of its defence activities so that it can focus on fast-growing telecoms, business software and financial services markets, said remaining defence operations would account for just two per cent of group turnover.

Director of communications Marie-Claude Bessis declined to divulge whether Sema had conducted due diligence on any likely US targets, as the group seeks to boost operations and offer services in a country that represents half of the worldwide information technology (IT) market.

"We are looking for an acquisition in the United States and we will do it in due course," she said in an interview. "We are working on this very seriously."

Sema, which earlier lifted half-year pre-tax profits by 18.8 per cent to 31.1 million pounds onsales of 610.56 million, says that it will be disappointed if the United States does not account for at least 10 per cent of turnover by 2001.

The group's defence business was the only part of its operations that was seeing growth matching company targets, partly because of rising competition and falling defence budgets. However, Sema said it was banking on software and telecoms, both of which had good growth and profit prospects.

Economic recovery in continental Europe was showing through in turnover, Sema said, with France generating a 16 per cent growth in local currency over the first-half and Spain 50 per cent. Sweden also showed signs of turnaround with 12 per cent growth while the UK grew 10 per cent from a strong base.

In mobile and fixed telecoms, turnover grew 22 per cent at constant exchange rates with growth mainly in products such as prepaid and short message services.

Sema, which joins the FTSE 100 on September 21 after a robust share price performance, employs around 17,000 staff and islooking to recruit at least 2,000 this year. Around 70 per cent of those have already joined the company.

The order book stands at 1,625 million pounds, up 34 per cent on last year, with a book-to-bill ratio of 1.13 underpinning the year in most business sectors.

The group said it saw "very buoyant" in business software, such as outsourcing and systems integration, finance and telecoms. Even in Asia Pacific, which has been hit by economic crisis, Sema said turnover was up 62 per cent after winning a lucrative outsourcing contract with Standard Chartered Bank.

Sema's operations span the UK, France, Italy, Sweden, Spain, Germany, the Benelux countries, Asia Pacific. The group also has a small business in the US, which accounts for around four per cent of group turnover.

France Telecom and French bank Paribas are the group's largest shareholders, holding 22.5 per cent and 14 per cent respectively.