SMS forms national practice structure

SMS forms national practice structure

Set to enhance and protect margins as well as cross-selling between various service offerings

IT services provider, SMS Management and Technology, (ASX:SMX) is forming a national practice structure.

The aim of the structure is set to enhance and protect margins, as well as leverage cross-selling between various service offerings. It will also facilitate the integration of acquired businesses. In September, SMS acquired Renewtek, adding 140 staff, $17.3 million in annual revenue and an offshore facility in Saigon, Vietnam. It also purchased Microgenx, a systems and development integration business with strong ties in the Queensland market.

While this structure has involved introducing a level of overhead, it will ensure SMS provides the highest quality service to clients and establishes a platform to scale up the business for the future,” SMS said in a statement to the ASX.

“SMS continues to seek out acquisitions, which add value to the business and support its strategic imperatives.”

The news comes on the back of the company announcing its half-year financial results, which indicated 24.7 per cent increase in revenue to $146 million, compared to the prior period. Net profit also rose 14.7 per cent to $15.2 million.

SMS CEO, Tom Stianos, said it had signed new contracts worth $173 million during the six month period.

Earnings before tax also increased 18.8 per cent to $21 million, despite a number of one-off impacts to the business involving a deferral of a multi-million dollar development deal for a gaming client. It was meant to commence in December, but was pushed back to January.

It also highlighted other key contributors that affected results such as the integration and costs associated with recent acquisitions, and some clients extended shut down Christmas period.

SMS also indicated its intentions to continue to recruit experienced personnel from the UK and Ireland as the competition for IT skills heats up in the market. It maintains 1539 employees within the organisation.

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Tags sms management and technologypractice structuresystems and development integration businessMicrogenx

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