IT Services provider ASG Group Limited today announced a net profit after tax of $5.2 million for the year to 30 June 2006, an increase of 99 per cent over the previous financial year.
IT Services provider ASG Group Limited today announced a net profit after tax of $5.2 million for the year to 30 June 2006, an increase of 99 per cent over the previous financial year.
The full statement is pasted below
IT Services provider ASG Group Limited today announced a net profit after tax of $5.2 million for the year to 30 June 2006, an increase of 99% over the previous financial year.
The strong earnings growth flowed from revenue of $59.3 million, an increase of $18.5 million or 45% on the previous year.
Basic earnings per share rose to 4.7 cents, up 68% from last year. The Board has declared a fully franked final dividend of 2.2 cents per share bringing this year's total to 3.2 cents, a 46% rise.
EBITDA for the year was $7.2 million, 66% above the FY05 level and ahead of the $6.7 million guidance released to the market in May 2006.
Second half EBITDA stood at $4.3 million, representing almost 60% of the FY06 total.
ASG Managing Director Geoff Lewis said that the result demonstrated the growing presence and strength of ASG across the Australian outsourcing and computer services markets.
"We are pleased revenue, net profit, earnings per share and dividends have all reached record levels and our business measures and performance criteria are on the increase across the board," said Mr Lewis.
"We have also grown EBITDA at a rate greater than revenue growth, demonstrating our strong increase in business activity is also reflected in improving profits.
"Particularly important is that our improvements in revenue and profit performance have been achieved from organic growth.
"These gains have flowed directly from the investment made to optimise costs, improve productivity and to leverage our Australia wide infrastructure."
Mr Lewis said the performance was also noteworthy given how the high demand for IT Services and technical staff has created cost pressures for the sector.
"ASG's business model has enabled us to control unit costs through productivity and deliver ongoing savings to our clients whilst still delivering increased value to shareholders," said Mr Lewis.
"Our access to skilled and experienced staff is very important to maintaining our growth. Significant attention is being addressed to this area and staff numbers have increased to more than 450 during the year, up around 25% over the year."
During FY06, ASG continued to perform strongly in securing new long-term contracts across all geographic markets in which it operates.
"The reference sites now established by ASG have increased our profile across Australia and enable us to compete for larger and more complex systems management roles and projects in both government and corporate markets," Mr Lewis noted.
"FY06 has been our best ever year for building up our backlog of contracted services to be delivered over the next five to ten years.
"Our Cumulative Revenue business model underpins our sustained growth and will prove to be our strong defence against any downturn in economic activity in the future."
"We continue to compete against the traditional array of multinational suppliers with expanding success.
"Domestic clients are increasingly recognising the value of an Australian supplier that can offer similar services with comparable risk, more flexibility and on a cost competitive basis.
"Importantly, ASG has also gained the necessary recognition to successfully engage major multinationals as sub-contractors on some of our bigger contract engagements."
"We expect to continue to build upon the recognition that we are receiving across Australia and that our ability to "upscale" into successively larger opportunities will be a source of yet more growth during FY07 and beyond."
Operating cash generation reached $4.6 million for the year after comfortably supporting the needs of the business even through a period of rapid growth. Debt has reduced to negligible levels and the Company is well positioned to fund its continued expansion.
"We pay a lot of attention to working capital management," said Mr Lewis.
"The operations must sustain themselves, make an acceptable return on shareholders' investment and support the payment of regular and improving dividends,"
"Higher profits are expected to generate additional cash, but we have continued to achieve improving generation of free cash flow when measured against revenue. Our intention is to preserve our capital and debt raising capability to support our acquisition program."
Mr Lewis said ASG continues to seek significant acquisition candidates that meet the Company's financial and business criteria.
"This still remains a key aspect of our growth program and the Company is well positioned from a balance sheet viewpoint when an opportunity arises. We are actively exploring a number of prospects and expect success in FY07," he said.
The business outlook for computer services generally, and outsourcing in particular, is expected to remain strong.
"Competition remains keen, and the strength of market demand for our type of services places pressure on costs and access to technical resources required for expansion," said Mr. Lewis.
"However, as we have demonstrated during FY06 ASG is well positioned to take advantage of the many opportunities represented by our business pipeline.
"The Company expects to convert these into delivery of further substantial profit and eps growth and directors anticipate that the current strong performance will be continued in FY07."
