Telco services provider, Anittel, has posted a net loss of about $5.9 million in the first half after the company took a $5 million goodwill write-off.
Anittel's managing director, Peter Kazacos, said customer preferences continue to move towards Cloud services rather than buying hardware and software services - a shift marked by demand for more outsourcing to Cloud and demand for shared infrastructure.
Kazacos said the company has just instituted certain "structural" and cost changes to tackle the decline that includes reducing the size of its workforce in the software and hardware divisions. He would not comment further on how many staff have been let go except to say that it constituted less than 10 per cent of staff in those divisions. Overall, Anittel employs just under 200 staff in Australia.
Anittel's revenue decreased about 14.7 per cent to about $26.7 million. However, its earnings before taxes, depreciation and amortisation, or Ebitda, stood at $123,000 down slightly from $152,000 from the year-ago period.
Its hardware and software product sales declined about 31.5 per cent, which it attributed to market conditions, changes in Microsoft licensing status, and the general market trend towards Cloud computing.
Its services business grew 8.7 per cent, including a 184 per cent increase in Cloud services revenue. Anittel plans to make a further push into the Cloud services, and plans to hire more people to support that business, said Kazacos.
The mid market should see strong growth in the Cloud space because of the services' consumption-based business models that suit many small businesses, as well as recent spate of natural disasters that have made the business case for such services attractive, according to him.
In addition, Anittel plans to also grow its hosted unified communications space, another area that is likely to grow on the back of demand from enterprise customers, he said.
While the company has previously developed its own Cloud solutions, which are seeing strong sales, it has accelerated plans to adapt its business models and cost structures in anticipation of the trend continuing, Anittel said in its filing.
It added it will continue to invest in the growth of delivery platforms for its Cloud services. It is also upgrading its hosted unified communications platform to use full HCS Cisco product set, which will be the cornerstone of the company’s Cloud services suite of products. That product will target mid-market and enterprise opportunities across Australia, the company said in its ASX announcement.
Anittel took the good will impairment charge, which was taken against the IT product and business unit.
It has a comfortable debt position, and has a $1.5 million bank facility which remains undrawn.