Changes to its organisational structure have impacted the first half FY16 results for ASX-listed SMS Management and Technology (ASX:SMX).
Revenue was down five per cent to $168.1 million and net profit was down 18 per cent to $7.1 million. EBITDA also dipped 19 per cent to $11 million.
SMS said revenue was impacted by an unexpected client decision to terminate a large transformation project; time lag in anticipated start dates of managed services engagements and delays with contract finalisation during its transition towards its new structure.
“We understood that the transition to the new organisational structure, particularly as it relates to our go-to-market approach, could impact contract wins and revenue in the short term,” SMS CEO, Jacqueline Korhonen, said in a statement to the ASX. “Having said this, we believe the changes we are making are important to the future positioning of the company and will address the latest technology trends and client demand.”
Despite this, SMS signed $214 million in contracts during the six months ending December 31. Key sectors included financial services and government. SMS highlighted that managed services contracts were up on the previous corresponding period.
“The encouraging growth in our sales pipeline over recent months, particularly in relation to open bids for large multi-year contracts, provides us with confidence in our defined strategy,” she said.