ASX-listed Volante Group will look to grow its business in the government sector after announcing profits after tax of $4.1 million for the financial year ending June 30, slightly down on the $4.3 million from the previous year.
Revenue for the year totalled $325.2 million, down 11 per cent, but consolidation in property and fixed costs, as well as 50-60 job cuts in sales, back office and management, meant costs were also down by 15 per cent. Volante Group now has a workforce of about 380 staff.
Group managing director, Allan Brackin, said the result, in what had been a difficult year, paid tribute to the underlying strength of Volante Group.
“The restructuring was very difficult and we went through tough times between April and October last year,” he said. “But the business is in pretty good shape going forward in terms of structure.”
Most revenue still comes through the group’s Volante Systems — providing IT procurement, managed services and infrastructure to major corporations — which did business worth $308 million in the 2002/03 finacial year. Major deals were sealed with Santos ($12 million), the Federal Government ($9.4 million), a consultancy firm and an insurance organisation ($6 million each).
The group’s applications development arm, Volante Solutions, increased revenue by 52 per cent to $7.3 million. Affinity, its IT recruitment business, fared less well in recording revenue of $6.6 million, down from $7.4 million in 2001/02. The Global Remarketing business, which resells second-hand IT products, saw revenue grow marginally from $3.6 million to $3.8 million.
Looking forward, Brackin said he was “conservatively optimistic” that the current financial year would see some IT refresh among customers and highlighted selective sourcing, particularly in government, as well as the application development business as areas of potential growth.
“I’m not going to start talking about 15 or 20 per cent growth in revenue but refresh is happening and we should see a small increase,” he said.
“Selective outsourcing has good potential going forward. Whole of government outsourcing is not so common now but we are the right size for selective deals and will play on being an Australian company. “Application development is still a fast growing space and allows us to get into organisations at a pretty high level.”
He claimed Volante Group had four or five contracts on the horizon. It was keen to continue on the acquisition trail.
“We are still talking to many companies about acquisitions,” he said. “We want to buy companies for the skill sets they bring rather than their profitability and would be keen to join forces with three or four if the price, fit and culture was right.
“We don’t want another company exactly the same as us but hope to have [a merger] done in the next six months.”
Brackin said a services company with a good track record in Federal Government would be particularly attractive but stressed this was not necessarily a prerequisite.
“We should have focused a lot more on government a few years ago but have now put ourselves in a position where they need to look at us very closely,” he said. “Federal Government is a big opportunity from a services point of view.”
Brackin said the Volante Group had attracted “a couple of sniffs” from companies interested in acquiring it “but nothing too serious”.
He refused to be drawn on whether those companies were Australian or multi-national players.