ASG profit up 50% but revenue flat

IT services provider ASG Group has reported a 50 per cent increase in half-year profit to $5.7 million on the back of what it says was a record period for new contract wins.

The company said a 1.4 per cent increase in revenue to $80.1 million was the result of increased growth backloaded into the second half of the year due to contract timings and the impact of one-off new contract establishment costs.

Managing director Geoff Lewis said the company had a strong base of annuity contracts underpinning its revenue stream, which was complemented by interest in its new world offering from clients looking to transform their IT operations.

“The half-year result highlights the underlying strength of ASG’s business model in a volatile economic climate,” Mr Lewis said.

ASG was awarded $120 million in long-term contracts in recent months, ASG said.

The company said its net debt was on track to be less than $10 million by the end of the full year.

Mr Lewis said the restructuring of ASG’s financing facility with National Australia Bank would lead to an improvement in the company’s working capital position.

ASG has locked in $145 million worth of work for the 2015 financial year, and flagged a further $320 million in potential business opportunities.

ASG shares closed 4.16 per cent lower at 69 cents per share.