IT services firm ASG Group says it expects its operating environment to remain “somewhat difficult” in financial year 2011-12, despite lodging a record $15.7 million profit in “patchy” conditions.
ASG’s revenue increased 27 per cent on the previous year to $153.3 million, to drive a 28 per cent increase in profit to $15.7 million.
The company delivered earnings per share of 9.67 cents per share over the full year, an increase of 10 per cent on FY10.
ASG Group Managing Director Geoff Lewis said he was delighted to deliver a strong financial and operational result.
“Operationally FY11 has been a very positive year for ASG as we have seen the completion of business model through the successful integration of acquired businesses and commissioning of the Data Centre,” Mr Lewis said.
“The acquired businesses have effectively provided the final pieces in our strategic services portfolio, meaning that we are now poised to compete with foreign service providers to win larger, long-term contracts that will provide us with the next leg up in terms of earnings growth.
“Contribution from acquired businesses was pleasing with a strong contribution to the overall group margin and solid revenues, despite tough operating conditions.
“In fact, we believe our ability to deliver strong revenue growth is a testament to the strength of our business model - recently enhanced by acquisitions - in the face of a patchy operating environment.”
Despite the record profit result, Mr Lewis said the prevailing economic climate to remain somewhat difficult over the next year.
He said the group expects strong revenue growth to come from the public sector.
“A lot of planning and hard work has led to the establishment of a national, fully integrated IT services Company that is now positioned to be a meaningful competitor to large global providers and which has a very strong operation platform to deliver future growth,” Mr Lewis said.
“We believe our next phase of growth will be substantially driven by our Managed Services business, where we will be focussing on securing very large, long-term contracts with major blue chip customers.
“We believe our business model and strong recurring revenue base differentiates ASG from our peers and will underpin strong earnings growth in the future.
“ASG is confident in its prospects of success in competing for these larger contracts as we can now match foreign providers on business model but beat them on client service, flexibility and local responsiveness.”
By close of trade today ASG’s stock had gained 5.6 per cent, to trade at $1.03.