IT services provider, CSG (ASX:CSV) has its eye on growth while transforming its business model to reduce costs.
For the 2013 financial year ending June 30, revenue declined to $184.6 million compared to the previous year of $202.8 million, EBITDA was $17.4 million and reported net profit was $8.7 million.
“CSG is on solid footing for future growth opportunities for the business to diversify its offerings, expand its customer base and create additional efficiencies in backend operations,” CSG managing director, Julie-Ann Kerin, said in a statement to the ASX.
According to CSG, its main focus for 2013 was to return the Australian Business Solutions division to an acceptable level of profitability, which was achieved via a $13 million cost reduction program and refocusing the sales team.
CSG stated its Enterprise Solutions division had a strong pipeline of opportunities including the anticipated rollout of the Department of Education, Training and Employment standing offer arrangement with the Queensland State Government. CSG said the business unit didn’t have a material impact on its results, but believes it will be a key growth area for the company in the medium term.
CSG achieved $13 million in cost savings and is on track to deliver further cost savings of $4 million by the end of the first half of 2014 financial year.
It will achieve this through improved IT and other business transformation activities. Capital expenditure is expected to be between $4 to $4.5 million in 2014.
During the next 12 months, CSG expects EBITDA will be between $27 to $29 million, representing 13 per cent growth.
Some of its objectives for the first half of 2014 financial year include finalising plans for rolling out a shared services group, increase new office product offerings including home branded paper, refine its Enterprise Solutions and government offerings, continue to grow its Financial Solutions and introduce a new sales model to focus on increasing its market share.Read more: m-View brings wearable Fire Cam cameras to the market
Closing cash balance was $40 million following a number of one off payments including $19 million in tax for the sale of its Technology Solutions division, $4.5 million for the Fuji Xerox settlement and $8.6 million for starting up its Finance Solutions Australia unit in March.
It sold its Technology Solutions business to NEC in May last year for about $227.5 million. After the sale was finalised, it put plans in place to focus on growth opportunities in its Print Services business and restructuring the division.