Mincom bounces back to black in 2004/2005

Stan Beer
Thursday, 29 September 2005 10:00

IT Industry - Development

Expansion into new geographic markets plus a renewed focus on core vertical specialisation has been credited with returning Australia's largest software developer Mincom to profitability in 2004/05.

Mincom Limited has reported a full-year profit of $6.1 million before tax and restructuring costs for the year ended 30 June 2005, turning around a $4.7 million loss in 2004. Pre-tax profit was $3.5 million, compared to a pre-tax loss of $4.7 million in the previous year. The post-tax profit was $1.4 million, compared with a loss after tax of $7.3 million in 2003/04. Revenue was also up 10% to $165.1 million compared to $150.4 million in the previous year.

According to Mincom, the return to profitability was supported by growth across all revenue lines and a razor sharp focus on core vertical specialisation.

"This profit is a direct result of a concerted effort across the company to grow our software licence revenue, increase our margins and manage our costs. In addition to growing well ahead of the industry average, we also laid the foundation for future growth with a significant push into new geographies such as China and Russia," said Mincom CEO Richard Mathews.

In May 2005, Mincom announced the opening of an office in St Petersburg, Russia and the extension of its contract with Siberia's Norilsk Nickel, the world's largest nickel producer.  Mincom has also upgraded its Moscow operations and will leverage its success in Russia to capitalise on other opportunities in the region, including Khazakstan and Uzbekistan.  

Mincom also signed a cooperative business agreement with the major Chinese software and solutions provider, Neusoft, to translate and localise Mincom's products for the Chinese market.  

Mathews said, "2004/05 marked a new beginning for Mincom with a new constitution, a more independent Board of Directors and the introduction of executives with more international expertise."

Mincom says that it maintained its research and development (R&D) spending, as it continued to invest in comprehensive business solutions for its customers, particularly in the areas of mining, energy, transportation, government and defence.  This investment in Mincom's core solutions included the acquisition of Chilean software company, Exedra, and its Aramis mining sales management software. The transaction was completed in April 2005.  

"In 2004/05 we continued our focus on providing comprehensive enterprise asset management solutions for specific industries.  An example of this is the work we will be doing with the Australian Defence Force to scope and design the world's first fully deployable, integrated tri-services military logistics solution, which will form the backbone of a global defence solution," Mathews said.

According to Mincom, its global managed IT services business, Mincom Managed Services, continued to reap the rewards of a strategy to broaden its customer base by signing key contracts with customers including Tarong Energy, Queensland's Department of Premier and Cabinet and Yarra Trams.  In addition, Mincom extended its managed services capabilities in Denver, with increased investment in both its support centre and data centre operations.  

In 2004/05, Mincom signed a number of contracts around the globe including:
 
· North America: Orange County Transit Authority; Newmont Mining Corporation; Burlington North Santa Fe Railroad; Hawaiian   Electric Co; Phelps Dodge; U-Haul International; Lockheed Martin; and Toronto Hydro
 
· South America: Compañia Minera Antamina; Crystalex Las Cristinas; Carbones del Cerrajón; and Anglo American

· Africa and the Middle East:  Zimbabwe Mining and Smelting; Anglo Coal South Africa; Skorpion Zinc; Eyesizwe Coal; Ivanhoe Mines; and INPEX Corporation
 
· Australia: Rio Tinto Coal; Tarong Energy; Newmont Australia; Ergon Energy and ENERGEX; Crane Group; OneSteel; VicRoads and the Australian Defence Force
 
· Europe: Norilsk Nickel in Russia; Metso Minerals in Finland