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Empired losses narrow amid digital services growth

Empired losses narrow amid digital services growth

Empired sees closing gap in bottom line

IT services company, Empired (ASX:EPD), has cited ‘standout growth’ in its data insights, digital, and Microsoft Dynamics businesses as it narrows its losses for the financial year ending June 2016. It reported an annual net loss after tax (NPAT) of $1.72 million.

While the result represents a 133 per cent plunge from the previous year’s results for the publicly listed company, it is a push in the right direction from its reported first-half net profit, which stood at $3.7 million for the six months ending December 2015.

In its latest financials, Empired told shareholders that it saw strong growth in its Microsoft Dynamics CRM and ERP services, which were up by 31 per cent for the period, its data insights business, which grew by 27 per cent, and its digital services segment, which surged by 132 per cent.

Meanwhile, infrastructure services increased by 25 per cent with strong growth in managed services, while application services continued to make up a growing portion of the company’s revenue, based on organic growth and full year contribution from Empired’s Intergen acquisition in late 2014.

The latest figures show that Empired’s applications and consulting services segment made up 75 per cent of revenue for the year ending June, with infrastructure services pulling in 25 per cent of the revenue.

Russell Baskerville - Managing Director, Empired
Russell Baskerville - Managing Director, Empired

Revenue for the year was up by 25 per cent, to just under $160 million, while profit before tax (EBITDA) was down by 31 per cent to $7.5 million.

Empired’s services revenue for the year was $141.8 million, while the company’s product and licence revenue was 18.2 million, both business segments up from the previous year.

Just over half of the company’s revenue for the year came from long term multi-year contracts, while new annuity revenue streams developed from Empired’s in-house Cloud-based SaaS IP, Cohesion, and its cloud platform, FlexScale.

“Following significant integration activities and disappointing earnings in the first half we pleased to report a strong recovery in the second half,” its CEO, Russell Baskerville, said in a statement.

“Importantly, we have experienced pleasing operating cash flow in the second half, significantly reducing our net debt.

High levels of contracted revenue, a healthy sales pipeline, and services aligned to growth segments of the market provide us confidence in delivering a strong financial performance in the coming year,” he added.

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Tags IT serviceMicrosoft DynamicsEmpired managing director Russell BaskervilleEmpired Ltdempired

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