ASG offshores to build on $9m profit

Perth-based ASG Group has announced plans to offshore 10 per cent of its workforce on the back of a return to profit for the 2013-14 financial year.

The company has today reported after-tax profit of $9 million for the year, up from a $26.7 million loss in the 2012-13 financial year, which was largely impacted by a $17.7 million impairment and write-down.

Operating revenue grew from $152.5 million in FY13 to $159.1 million in FY14, which resulted in earnings before interest, tax, depreciation and amortisation of $22 million.

The company adopted a new strategy in 2012 in deciding to focus on what it terms ‘New World’ services - essentially cloud based products and services.

Business from this segment grew from just 1 per cent in the 2012-13 financial year to 13 per cent of revenue in the year to June 30 2014.

The company said it expected this trend to continue throughout the current financial year and estimated revenue from New World services to account for around a quarter of overall revenue over 2014-15.

ASG is also planning to further improve its performance and increase margins by cutting costs and driving growth in the cloud-based services to achieve economies of scale.

It said part of this strategy would involve an ‘offshoring strategy’ in which 10 per cent of the workforce would be working outside of Australia by the 2016 financial year.

ASG is Western Australia’s seventh largest information and communications technology company with 225 staff working in the state.

Chief executive Geoff Lewis said the return to profit was evidence of ASG reaping the rewards of investment in the new business model together with cost savings.

“Significant custome wins during FY14 have vindicated that our business focussed, utility-priced solutions are key to continued growth,” he said.

“Our proven capabilities to deliver in this space have enabled ASG to capitalise on first mover advantages to achieve sustained success, in a market that is undergoing a fundamental shift in the way ICT services are produced and delivered.”

During the past six months, ASG has signed contracts or been awarded preferred bidder status in business worth $100 million with major customers including Clough, Australian Transport Safety Bureau and Australian Maritime Safety Authority.

Last week, ASG sold its Bentley data centre for $11.7 million, which it intended to use to pay down debt.