Western Australia-based services provider, ASG Group (ASX: ASZ) has defied the gloomy economic climate and forecast a 43.6 per cent rise in full-year pre-tax profits
According to its profit guidance statement, ASG is expecting $16 million in pre-tax profit in the year to June 30, up from $11.1 million in 2007.
CEO, Geoff Lewis, said the higher result was driven by significant government and corporate business wins and its focus on multi-year services agreements.
Over the past six months, ASG picked up $100 million in new contracts including a $30 million deal with the Federal Government Department of Infrastructure, Transport, Regional Development and Local Government.
Lewis was unable to confirm its full-year revenue figure at this time. Up to 85 per cent of ASG's revenues came from its customers' operational budgets rather than capital expenditure, while 70 per cent of its business came from the public sector, he said.
"We are not seeing the economic slowdown and our pipeline is very strong rolling into 2009," Lewis said. "We have a fair bit of visibility on projects coming up and there are plenty there - the commercial and government sectors are still spending.
"We are a very predictable business both from a cash flow and profitability point of view."
Federal Government IT services contracts, such as the Department of Agriculture, Fisheries and Forestry's contract announced earlier this week, also presented new growth opportunities for ASG, Lewis said.
"Canberra is hopefully one of our strongest growth markets - we are hoping to get our share of business there," he said.