Volante Group and Data #3 both expect to hit their financial year targets after announcing half-yearly results last week. Both IT services firms will pay shareholder dividends on the back of the profitable results.
Results from other players including KAZ Group and Oakton contributed to a picture of profitability in the IT services sector, but individual companies varied on whether services or products were generating the revenue.
Product revenue was down for Volante. Strong product sales were the key for Data#3 and KAZ Group. The sale of its product division helped Oakton make a $3.26 million profit.
Volante announced an after tax profit of $3.1 million for the second half of 2003, up 2.7 per cent on the first six months.
It will pay shareholders a dividend of 4 cents per share.
Volante Group managing director, Allan Brackin, said the results showed Volante’s strength in a period of reduced IT infrastructure spending.
“We have adapted well to the changing market, building our managed services revenue as infrastructure revenue has been eroded by lower product prices,” he said. “Volante Group now has major IT services revenue, with a significant and growing presence in the selective outsourcing market.”
Volante Systems, which provides 94 per cent of the Group revenue, has grown its services business, although product revenue was lower. It has increased the number of units sold.
Data #3’s revenue for the first half represented the company’s strongest ever reported operating performance for that period. Revenue was up $3.9 million compared to the year before period. It will pay shareholders a dividend of $0.06 per share.
In contrast to Volante’s depressed product revenue, Data#3 saw an increase of nearly $6 million in product sales. Services dropped by nearly $2 million.
Data#3 attributed the growth in product revenue to strong growth in its enterprise infrastructure and licensing businesses, and its Queensland-based integration business.
The company blamed the drop in services revenue on the ending of its reseller agreement with SAP. But while lower year-on-year, its services revenue was in line with the first half of 2003.
Oakton recorded strong results for the half-year ending December, announcing a net profit after tax of $3.26 million, up 12.2 per cent over the same period last year.
Managing director, Paul Holyoake, attributed the increase in profitability in part to the divestment of its products division which it sold off to software company, The Distillery, in July.