ASX-listed Volante Group has again released figures that defy the downward trend in the hardware reseller market, posting a net profit after tax of $7.16 million for the 12 months to 30 June 2001.
With revenues up 72 per cent and profit up nearly 300 per cent on the previous 12 months, group managing director Allan Brackin had reason to smile when announcing the results yesterday morning.
Brackin said the group had hit its forecasts, and every single business under the Volante banner had traded profitably. He attributed the positive results to the successful merger between the group's two IT procurement companies (Volante IT and AMS), and the new opportunities provided by cross selling the services of its Netbridge division to the customer base of the two procurement companies.
Brackin said Netbridge was now serving four or five major corporates as a result of the cross-selling opportunities, and is quoting for million dollar-plus contracts on a weekly basis. Netbridge, which was previously trading at a loss, has now doubled its revenues and Brackin expects within three years the division will grow from 200 to 600 staff.
Similarly, the groups "Global remarketing Division" refurbishing used computers have come off IBM Finance deals and increased their revenue by 77 per cent to $9.2 million. "It's a nice little earner," said Brackin.
The next twelve months will see the group look for some return on investment on the new Enterprise Resource Planning (ERP) system being implemented to connect the back-ends of the VIT and AMS procurement businesses.
Brackin said that while the hardware reselling market is experiencing negative growth of around 10 per cent, the Volante group should stay ahead of the game by continuing to find new business opportunities that earn the company in excess of the reductions in existing customers' orders.
The group will also continue to look at acquiring two or three service companies such as Systems Integrators valued at around $3-$5 million to integrate with and expand the Netbridge business. Brackin said the company could afford such acquisitions through either its cash flow from revenues or through increasing credit opportunities created through improved financial performance and reduction of debt.
"This business makes money," he said of Netbridge. "It generates cash, and just as important, it doesn't use too much of it."