Nedlands-based information and technology company ISS Group Ltd has recorded a 37 per cent decline in net profit to $936,304, down from the $1.5 million recorded in the previous year.
Nedlands-based information and technology company ISS Group Ltd has recorded a 37 per cent decline in net profit to $936,304, down from the $1.5 million recorded in the previous year.
The full text of an ISS Group commentary is pasted below
ISS Group is again pleased to report an increase in revenue over last financial year reflecting a strong demand for its products and services across the globe. Operating profit before tax (2007 - $1.03 milll) was marginally lower than last year (2006 - $1.13 mill), as a result of the continued investment in expanding markets (North America and Europe) as well as an increase (on last year) in product development. An analysis of the Operating Profit compared to last year is provided below.
This year's revenue increase of 25% to $ 9.9 million is a reflection of the growing reputation our products and services are gaining globally. Gross margin increased by 6.5% to $ 3.5 million, reflecting the costs of the current phase of the ISS Group's global expansion. Profit after Tax is down by 37% to $ 0.9 million, due mainly to the booking of tax loss credits in the 2006 year.
ISS had significant start up investment costs in Europe and North America, reflecting branch losses of $208,248 and $578,237 respectively. As a contrast, the now established Asia branch increased its profit to $226,435, and increase of approximately 542%.
Investment in our core products continues with an increase of 16% on last year to a total of $2.23 million for 2007. We expect that this will reduce in the first 6 months of the new fiscal year as we reach the end of this initiative. The feedback received from existing and potential customers on the advanced functionality which will be offered, has been very positive. We expect this to help ISS Group break into new markets as well as generate new sales from existing customers.
Looking forward, ISS Group will focus on further developing its regional offices. We expect to move Europe and North America into positive returns, in line with Asia by the end of the 2008 financial year. We expect sales to continue the trend of large multi million dollar deals such as the recently announced Fortescue Metals Group transaction, which will come with long term Maintenance and Support revenue.
Our financial targets for the new financial year are aggressive but we believe achievable based on the current order book and the proposals that we have in the pipeline. Our confidence is further bolstered by the continued global growth and demand in the resource sector. However as a result of this growth, one of our greatest challenges will be to ensure that ISS Group has the right people on board to meet this expected demand.
