Updated: ASG's new $23m deal

Updated: ASG's new $23m deal

ASX-listed service provider starts off 2010 with a $23m deal and $500 million in the "project pipeline"

IT services provider, ASG Group (ASX:ASZ), has won a three-year contract with the Department of Education in WA worth more than $23 million.

Under the arrangement, which comes with two one-year extension options, ASG will provide Oracle applications management, server operations and database administration for the department.

“The department has the discretion to appoint ASG as its key corporate and enterprise applications partner,” the company added in a statement. “In this role, ASG will provide additional services for mission critical systems.”

ASG chief officer of sales and strategic operations, Murray Rosa, said the contract was put up for tender in October and the two companies discussed contracts in November.

“We were already incumbent in the account for the application support part of the tender,” he said. “This contract brought to the table a renewal of all those services as well as the infrastructure and managed services component.”

The win comes after a solid 2009 for the service provider, with ASG reporting a 25 per cent increase in full-year profits to $11.3 million and a major deal in late June with Qantas worth $13 million.

ASG’s strong growth has been supported by the collapse of one-time rival, Commander, and the company has larger deals coming in the next few weeks.

“We’re very comfortable about achieving at least a $10 million [pre-tax profit] result for the first half,” Rosa said. “We will probably be announcing a few more contracts over the next six weeks and we’ve got about $500 million of opportunities sitting in our pipeline, a good chunk of which is going to happen between now and June.

“We’re looking at a number of organisations that complement this business for acquisition, so I would expect there would be some announcements if we’re successful in this fiscal year.”

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Tags it servicesASG GroupWA Department of Education


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