ASX-listed IT components manufacturer and distributor Legend Corporation (ASX: LGD) has made up for earning losses from 2008.
In its half-year results to December 31, the company recorded a 19 per cent year-on-year net profit reaching $3.2 million. Pre-tax profit hit $5.7 million and operating cash flow tipped $7.4 million. The company's net debt was reduced to $12.7 million.
Revenue was down $4.5 million to $43.5 million compared to the last corresponding period but the result was still favourable when juxtaposed to second-half of 2008’s $15.6 million revenue drop.
Legend, which has 230 staff under its roof, had suffered a huge financial blow several years back after a harrowing performance in 2007. CEO, Bradley Dowe, blamed the company’s previous misfortunes on the market's hesitance in relation to the Microsoft Vista operating system.
“Prior to the GFC, we, like the rest of the industry, suffered the effects of Microsoft’s ill-fated Vista product,” he said. “We were a larger business at the time in terms of revenue and as a major component supplier to the integrator community, when that marketplace suddenly collapsed it had a significant impact on our revenue.
“As those customers unhappily left the space, the components market reduced with the client population.”
Through shifting focus from a memory component-centric business and branching out into the computer rooms sector, Legend has worked its way back onto favourable fiscal ground. Dowe also credited reduction in cost through efficient business processes and securing new clients as conducive to the company’s comeback.
“We have strengthened our sales team, deployed regional stock so we can better serve our clients and widened our product range along with some marketing initiatives,” he said. “All of those investments contributed to us improving our market share in 2009, which was a difficult time for everybody.”
Legend began its recovery last year, reporting $3.13 million net profit in its 2008 half yearly results ending December 31. It had also reduced debt from $34.1 million to $24.5 million.
Dowe said judging from the recent results, Legend has demonstrated it has overcome its financial obstacles.