Interactive profit dips despite revenue surge

Interactive profit dips despite revenue surge

Posts $220 million in revenue, but costs on the up

Mal McHutchinson (Interactive)

Mal McHutchinson (Interactive)

Credit: Interactive

Interactive has seen its revenue rise by 5 per cent to A$220 million for the financial year ended 30 June 2020.

However, the Melbourne-headquartered managed services provider’s profit after tax saw a decline of 33 per cent, closing at A$9.2 million.

The fall in profit came as Interactive’s cost of sales rose by 39 per cent to A$38 million and employee benefits rose by 7 per cent to A$80 million.

Depreciation and amortisation expense also increased significantly by almost 50 per cent, putting A$49.4 million on its costs sheet.

In addition, the company also paid a tax bill of A$4.5 million, 15 per cent higher than the year before. When asked by ARN, Interactive said the fall was mainly due to the new lease accounting rules, which affected it due to its large property amount on the balance sheet. 

Meanwhile, Interactive’s earnings before income tax (EBIT) hit A$23 million, up from A$21.6 million. 

The results also mark a sustained period of growth that has lasted for over 15 years, the MSP said. 

“Continuing our growth with a 6 per cent elevation in revenues and EBIT, [the results demonstrate] the resilience of our business and our relevance in supporting our customers in even the harshest of economic environments,” said Mal McHutchison, Interactive CEO.

“As we move into 2021, we see significant opportunity to assist organisations optimise their cloud spending, many have moved urgently to the cloud and now find themselves financially impacted by that decision. 

“The move to flexible working has also resulted in a need to deal with heightened security risks and our cyber security team are skilled in developing and executing cyber monitoring and management for companies of all sizes.”

Interactive was established in 1988 and claims more than 2,700 customers and 650 employees. The company is headquartered in Melbourne and also has offices in Sydney, Brisbane, Canberra, Adelaide, Perth and Auckland, in New Zealand.

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