DESPITE winning a number of lucrative contracts in recent months, IT services company ASG has no immediate plans to pursue a stock market listing.
DESPITE winning a number of lucrative contracts in recent months, IT services company ASG has no immediate plans to pursue a stock market listing.
One year ago the company said the effect of international market movements on the Australian IT sector had caused it to defer its plans for an initial public offering through the raising of $6.85 million.
At that time – late March – the company’s managing director Geoff Lewis said ASG would seek to list later in 2001, by which time it was hoped market conditions would have improved sufficiently to support the IPO.
But in discussing a contract with the WA TAB that ASG won last week, Mr Lewis said sentiment towards the broader IT industry was a greater influence on potential invest-ors than the fact ASG was performing well, and the decision to defer the listing was right in those circum-stances.
“I don’t know … whether the market is still in the position for an ASG to come to the market and be received as well as it should be,” he said.
Mr Lewis said that, although the company was quite large in terms of employee numbers and annual revenue, as a listed company it would still have too small a market capitalisation to attract the interest it deserved.
“I think that it’s getting close to the point where we could do it again, but we’re certainly not going to rush it. Last year we were taken all the way to the altar then had to stop. It was pretty painful (and) frustrating, so we’ve got to keep our powder dry and go when the time is absolutely right to go,” he said.
Mr Lewis said the company was not particularly capital intensive, but it would need additional funding if it were to pursue an acquisition program.
“We’re looking at exploring a lot of corporate options and (acquisition) is one of them definitely. With the kinds of revenues and profitability we’ve got, we’re in a good position to leverage our balance sheet for that,” he said.
The first phase of the TAB contract requires ASG to move the TAB’s database from a mainframe to a mid-range plat-form. This work is scheduled for completion by October this year.
In the past six months ASG has signed contracts with Clough Engineering, Iluka Resources and AlintaGas for the provision of different services including systems integration and the outsourcing of technical support.
