UXC profit spurs acquisitions and staff increases

Stan Beer
Thursday, 23 February 2006 18:45

IT Industry - Listed Tech

Australian IT services provider, UXC (ASX:UXC), has posted strong half-year results and says it will now pursue acquisitions and look to increase its staff.

UXC reported a half year profit of $6.8 million for the year ending December 2005 and stated it is on track to record revenue of $280 million for the full year. The result represents an increase of 10% on a like-for-like basis. Revenue for the half-year was $133 million – up 16% on the previous corresponding period.

“UXC is on track to deliver revenues of some $280 million this year from existing businesses. We expect further growth in earnings and earnings per share based on organic and acquisitive growth,” said UXC Chairman, Geoff Lord.

“The increase in earnings has been driven by strong organic growth within the IT Business Solutions Group – the vast majority of EBITDAC earnings ($14.5 million) came from companies that were already part of UXC at the start of FY 06,” he said.

UXC staff numbers increased to more than 1,600 (excluding contractors) a rise of 22% on the previous corresponding period.

The IT Business Solutions Group accounted for more than 70% of UXC’s total revenue.  It recorded revenue growth of 27% to $95 million for the half.

“This result demonstrates the strength of the UXC business model.  Customers want to use specialist IT providers and our business units are all in the top tier in their technology segment.  We are especially pleased with the growth and stature achieved by our Oracle/PeopleSoft and Microsoft businesses,” said Cris Nicolli, CEO Business Solutions Group.

“UXC has built one of Australasia’s largest and most capable IT solutions businesses.  The creation of a group to foster cross-group sales earlier this year has already been rewarded with sound revenue and profit growth – many of the deals won during the period involved more than one UXC business unit.
 
Upon posting the results, UXC has indicated that it is on the acquisition trail.

“UXC’s balance sheet is very strong, and with a low debt to equity ratio (net 8.5%) we have significant capacity to pursue further growth,” said Mr Lord.

“Strategic acquisitions will continue to complement organic growth as a foundation for expansion and we expect to finalise a number of transactions before year end. 

“Leading players in growth markets such as Business Intelligence, IT security and strategic consulting, as well as companies that build on our core strength in a key technology segment are particularly attractive,” he said.

UXC stated that result comes on the back of significant government and business contract wins including Sydney Water Corporation Residential Water Efficiency Retrofit Program ($22 million), the recent UAM Asset Inspection contact ($7.5 million) and the high profile Department of Finance and Administration Parliamentary Entitlements System ($6 million).