Govt, mining in ASG sights for coming year

IT services provider ASG Group has this week announced a profit boost of 28 per cent to $15.7 million for the financial year and said it will focus on the mining and public sectors going forward.

IT services provider ASG Group has this week announced a profit boost of 28 per cent to $15.7 million for the financial year and said it will focus on the mining and public sectors going forward.

ASG reported its profit increase on the back of a 27 per cent revenue rise to $153.3 million for the year ending 30 June 2011. ASG said that it had delivered a positive result in a "patchy environment", and expected the 2012 financial year to be equally as challenging.

"ASG expects the operating environment to remain somewhat difficult in FY12, particularly for private sector investment in information technology.

"Despite this, ASG is confident it will deliver revenue growth and shareholder returns in FY12 due to the strength of the group's business model. A combination of ASG's long-term contracts and recurring revenue base, acquisition benefits and focus on securing larger contracts are expected to underpin future revenue and earnings growth," ASG said in its results.

ASG Group spent much of its financial year buying up SAP providers to bulk up its offerings, acquiring Courtland Business Solutions and Progress Pacific last year. The company said in its results that it had completed integrating the acquisitions into the business.

As a result, ASG believes its managed services business arm will become its future cash cow.

"ASG will focus on its Managed Services division with the goal of securing larger-size contracts in the $100 million to $500 million range as customers increasingly accept ASG as a genuine local alternative to foreign firms," the company said.

Citing a tough environment in the private sector, ASG Group told the market that it would now focus on picking up government contracts.

"In the current economic climate, strong revenue growth is expected to come from the public sector, in particular federal government, an area upon which ASG has a strong focus," the company said, adding that it would also continue its focus on the mining industry.

"The resources sector is another market that continues to experience very strong growth, with many organisations in 'start-up' mode that will have significant future IT demands — ASG is well positioned to service this sector following the recent integration of acquisitions."

ASG reported that its datacentre build is now complete and is paying dividends to the business.

"During the reporting period, ASG Group completed and commissioned the new datacentre, which is already performing ahead of expectations."

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