Salmat’s strong earnings, profits up

Gordon Peters
Sunday, 29 August 2010 23:43

IT Industry - Market

Outsourced services provider, Salmat, has reported strong double digit growth in earnings and net profit for the 2009/10 financial year and has passed these earnings to its shareholders through an increased final dividend.

In the results announcement, Salmat CEO, Grant Harrod, said the results reflect a “strong focus on streamlining and consolidating the Salmat business while aligning our suite of services through the One Salmat strategy to drive profitable growth.”

Harrod said earnings growth was impressive for the financial year with earnings before interest, tax and amortisation (EBITA) increasing by 17.3% on the prior year to $91.2 million, exceeding the anticipated range of $85-90 million.  In addition, Salmat reports that net profit after tax, but before significant items, increased by 43.8% to $47.4 million, while net profit after tax and after significant items was up 42.5% to $49.1 million.

The company’s improved profitability led to an earnings per share of 31.1 cents: an increase of 43.3%.

According to Harrod, Salmat’s strong position and the board’s confidence in the company’s future led to the declaration of a final dividend of 12.5 cents, bringing the full year dividend total to 23.5 cents per share, fully franked - a 17.5% increase on the prior year. The Board has also declared a special dividend of 10.0 cents per share fully franked, bringing the total dividend to 33.5 cents per share, up 67.5% on the previous year.

“Our financial position is very positive, with excellent cash flow and plenty of headroom on our finance facilities.  During the year, we managed to reduce our debt by more than $33 million, with net debt standing at $134.3 million by year end. Cost control, productivity and margin enhancement programs have been very successful and have delivered excellent results during the year.

“Importantly, Salmat has made significant progress in delivering on its One Salmat strategy, which aims to package all its services into an extremely compelling ‘one stop’ multi-channel communication solution for its clients, substantially improving the return on their marketing investment.”

Looking ahead at the outlook for the company, Harrod says the 2009/10 financial year built the foundations for strong future growth for Salmat.

Harrod said Salmat anticipates that market conditions will remain fairly consistent over the next twelve months and that clients will continue to seek business solutions that drive revenue and enhance competitive advantage.

“With our strong cash flow and solid new business pipeline, we are in a prime position to capitalise on opportunities within our existing client base; extend into new markets such as the Small to Medium Enterprise (SME) space; and pursue strategic acquisition targets.”