Fuji Xerox New Zealand has reported a sharp drop in revenue and profitability across its two New Zealand businesses for the year to 31 March 2020.
While the company had recapitalised to strengthen its balance sheet during the year and also reported sustained positive cashflows profit after tax of $513,000 was well down from $3.8 million in 2019.
Combined revenue of $155.9 million was down from $182.7 million.
The results combine numbers from the Fuji Xerox NZ trading company and its associated finance company, which are effectively one business.
Commenting on the company’s performance, Fuji Xerox NZ managing director Peter Thomas said while this year’s profit was lower it was still a solid result, which reflected a significant effort and commitment from Fuji Xerox NZ's people.
“Recognising the continued pressure on print revenue we are focusing on initiatives to diversify and grow," Thomas said.
Fuji Xerox NZ had exited unprofitable business lines, Thomas told Reseller News, while a natural decline in print volumes also contributed.
Another change was a shift to operating leases rather than finance leases, which meant the company did not book revenue up-front on some contracts.
On the bottom line, Fuji Xerox's local business had also made increased provisions for doubtful debts as the potential extent of the COVID-19 pandemic emerged in March.
"Acquiring CSG and its IT services company CodeBlue last year was a key part of this, and we’re making good progress to integrate both companies."
COVID-19 was driving the need for remote and paperless work, and Fui Xerox had seen increased demand for its solutions that help customers digitalise their operations and drive efficiencies, including accounts payable automation, e-signature solutions, and contract lifecycle management software.
"We expect to see further growth in these areas in the year ahead," Thomas said.
Thomas said even after the return to level one lockdown, revenues from print consumption remained down around 20 per cent.
"Twenty per cent of print volumes has disappeared because of COVID and is unlikely to be recovered," he said.
Thomas said that was "pretty consistent" across the print industry, driven by a change of habits which was likely to be be permanent.
Fuji Xerox New Zealand returned to a net positive equity position of $84.3 million after issuing shares to Fuji Xerox Asia Pacific to recapitalise the companies’ balance sheet.
Thomas said that was a very positive development for the company.
"Fuji Xerox is a large provider of print capability in the market but more and more our business is about helping our customers go digital and embrace software and solutions," Thomas said.
"The acquisition of CSG and Code Blue gives us a chance to diversify into other areas and we continue to grow in those areas."