Multi-year contract wins push ASG yearly revenue up 16 percent

Australian IT service group ASG Group is already looking forward to a strong 2017 financial year, after reporting record results for the 2016 financial year.

The company said revenue saw a 16 percent increase to AU$188.7 million, all of which it said was achieved 100 percent organically. ASG also reported net profit after tax of AU$12 million, up 26.1 percent year on year; and earnings before interest, tax, depreciation, and amortisation grew 32 percent on the previous year to AU$26.7 million for the full year.

The company attributed the profits during the 2016 financial year to seeing corporate, state government, and federal government customers continue to transition to "New World" as-a-service offerings. New World revenue made up 38 percent of total revenue, up from 25 percent recorded last year.

In addition, ASG reported it signed contracts worth more than AU$300 million in revenue, AU$180 million of which were new contracts and AU$120 million were extension of existing contracts, pointing out the average contract length was four years plus four year renewal.

Some of the new contracts ASG won during the year were with the Department of Finance, the Victorian Department of Education and Training, CIMIC, State Super, and the Australian Bureau of Statistics.

As part of the deal with the ABS, ASG will be responsible for delivering a new enterprise data management environment using Oracle technology to help the ABS produce statistical information.

In turn, the expansion of multi-year contracts has locked in AU$185 million in revenue for FY17, with ASG saying it believes there is still a pipeline of opportunity valued at AU$370 million.

CEO Geoff Lewis said FY16 has provided a springboard for ASG to deliver meaningful earnings growth in the next two years. He said looking ahead, the company plans to further growth revenue by delivering technology services for its corporate and government customers.

"Corporate Australia is undergoing a transformation in how it procures and adopts new technology -- effectively buying it as a service, much as we do in our personal lives," he said.

"In conjunction with world leading partners like Oracle and Symantec, ASG has a fast-growing business advising some of the country's biggest organisations on how to best take advantage of what's available with [new/ new world] technology."