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ASG Group profit jumps 50 per cent

ASG Group profit jumps 50 per cent

Posts $5.7 million profit in "volatile" economic climate

ASG chief executive Geoff Lewis.

ASG chief executive Geoff Lewis.

ASG has recorded a 50 per cent increase in profit in its interim financial results on the back of its "new world" service offerings.

The company posted $5.7 million in profit, compared to the corresponding period and revenue of $80.1 million for the half.

It also reported EBITDA of $11.1 million, which included a ramping up of major new contracts.

According to company statement, ASG's growth has been based on the exceptional takeup of its "new world" service offerings, which is what it calls its version of 'as-a-Service'.

ASG chief executive, Geoff Lewis said the company was is in a unique position of having a strong base of annuity contracts which underpinned the revenue stream, complemented by unprecedented interest in its "new world" offering by clients looking to transform their IT operations.

"Over 80 per cent of our new contracts are new world."

The revenue figure ($80.1 million) has increased growth backloaded to H2 due to contract timings and the impact of one-off new contract establishment costs.

According to a company statement, the result meets guidance given at the annual general meeting on October 2014.

In the past year ASG has been awarded long term contracts valued in excess of $120 million and continues to gain traction in the public sector - both state and federal government.

Lewis the said half year result highlighted the underlying strength of the company's business model in a volatile economic climate.

"The outlook for the second half is solid, given that major new contracts have been transitioned from the capital intensive establishment phase, to the delivery phase," he said.

"In addition, the restructuring of our financing facility, with National Bank Australia as our preferred banking partner, will see a significant improvement in our working capital position due to reduced interest and annual repayment commitments, resulting from our reduced debt position."

It has a pipeline in excess of $320 million for managed services and new world opportunities.

This will contribute strongly to both the second half of the 2015 financial year and 2016.

"The success ASG is experiencing in these areas contrasts with the continued downward trend in the traditional project services and product areas impacting the pure staff augmentation business models," according to a statement.

"This pipeline builds on the already locked in revenue base of $145 million for financial year 2015."

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Tags new world servicesCloudGeoff Lewishalf year resultsASG chief executive

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