​Acquisitions augment UXC record half-year revenue

A series of acquisitions carried out by Australian IT services company UXC during the financial year ending 2014 has helped drive the publicly listed company's revenues in the first half of FY15 to AU$322.2 million.

Australian IT services company UXC has reported a record half-yearly revenue of AU$322.2 million in the six months ending December 2014, driven by revenue from a series of acquisitions it made in the financial year ending 2014.

"Revenue and earnings growth in this half came primarily from the acquisitions UXC made in the 2014 financial year," the company said in its half-year report (PDF). "UXC has shifted its focus to providing clients with high-quality managed services with annuity revenue streams, and is improving customer relevancy, mix of business, margin potential, and quality of earnings."

Among the FY14 acquisitions that helped drive UXC's revenue surge for the first half was Microsoft Dynamics specialist Tectura, which it bought in 2013 for a reported $21 million as part of its North American strategy.

UXC's investments in the North American market also include Cole Systems, which was snapped up by UXC's subsidiary UXC Eclipse in late 2012.

The company said that the combined performance of its FY14 acquisitions were within its projected North American business targets.

UXC's initial move to the North American market was prompted by a client's request to undertake a major project in the region. UXC said that its success in this project led to additional work and the opportunity to invest in the market.

Other UXC acquisitions during the financial year ending 2014 include ServiceNow reseller Keystone, which it bought in late 2013, and Melbourne's White Labelled, also snapped up by UXC in late 2013.

"The successful integration of Tectura, along with the calibre and number of new clients choosing UXC, means we have established a strong presence in this important Microsoft market to underpin our ambition to build revenue from our North American business to exceed $100 million," the company said.

All up, UXC's net profit after tax (NPAT) for the half improved by 81 percent to AU$7.1 million compared to the same period the prior year, while NPAT from continuing operations improved by 94 percent to AU$7.6 million.

The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) for the period improved by 47 percent.

However, UXC's half-year result was impacted by a one-off charge of AU$0.5 million against discontinued operations.

The company also said that subject to final court approvals, all litigation relating to a class-action lawsuit that was brought against the company over the part its former subsidiary SP AusNet played in the 2009 Victorian bushfires has been resolved. All matters have been negotiated between the parties, with no further financial or cash impact on the company, it said.

Looking forward, UXC said it would continue to look for acquisition opportunities that will provide it with strategic benefit, along with accretive earnings capability.

"Any opportunity will be evaluated in the context of our strict and disciplined criteria and our working capital and balance sheet capacity," the company said.