A significant shift in business strategy is bringing solid results for Perth-based information technology company ASG Group, which has recorded three successive quarters of positive earnings.
The company has today announced earnings before interest, tax, depreciation and amortisation (EBITDA) of $10.7 million for the first half of the 2014 financial year.
Net profit before tax amounted to $5.6 million, which is a $12.5 million improvement on the $6.9 million loss recorded over the previous corresponding period and in line with forecasts.
After tax profit was $3.8 million - compared with the $4.6 million loss recorded for the first half of the 2013 financial year.
ASG has been clawing its way back into the black after an extended period of realignment.
In the 2012 financial year, ASG embarked on a strategy to shift from a traditional provider of IT infrastructure and services to also include what it describes as ‘new world’ offerings.
That involved heavy investment in resources to provide customers with outcome-driven services supported by cloud-based capability.
Mid-way through the 2013 financial year, ASG was faced with a realisation that it couldn’t provide both traditional and 'new world' services, and so restructured the business to fully focus on the new outcome-driven services.
It stated the restructure would bring $8 million in annualised savings.
Improved earnings as a result of the new strategy started to become apparent towards the end of FY2013, when EBITDA was $3.7 million in the final quarter.
The six months since have continued to be positive for the company with revenue of $79 million (up from $75.8 million for the previous corresponding period) and $101 million worth of contracts signed.
ASG states it has identified a further $200 million of potential contracts with 'new world' opportunities of more than $50 million.
