Empired flags modest revenue

IT services provider Empired has flagged modest results for the first half of the financial year due to a drop in public sector revenue in New Zealand.

The Perth-based company released a trading update to the ASX today that said earnings before income taxes, depreciation and amortisation was expected to be between $7 million and $7.3 million.

Revenue increased slightly compared with last year, with soft public sector revenue in NZ during the protracted election period listed as the primary reason for the result.

Other areas of the business are performing to expectation.

Empired said it expected earnings to improve in the second half of the year due to a restart of significant public sector projects in NZ and cost-cutting measures worth $2.5 million per annum.

Managing director Russell Baskerville said the company was pleased with the expected earnings, given the pause in public sector spend in NZ.

“The company will achieve this result without significant impact to billable staff numbers ensuring capacity to return quickly to expected revenue and earnings levels as work ramps up in the second half,” he said.

“Management have also been highly focused on costs during the period with annualised overhead reductions of approximately $2.5 million per annum that will further improve second half earnings and beyond.

“The company is tendering on some exciting opportunities currently and we are confident that this combined with the above comments places the company well to deliver a pleasing second half and full-year result.”

Empired shares finished up 3 per cent at 52 cents.