Digital growth drives $70M revenue for RXP Services

Digital growth drives $70M revenue for RXP Services

Reveals 26 per cent increase from its previous year's first half results

Technology and digital services partner, RXP Services (ASX:RXP), has revealed a revenue of $70.6 million for its first half of the 2017 financial year, in its results for the six months ending December 2016.

The results represent a 26 per cent increase from its first half of 2016 financial year results, which amounted to $55.8 million in revenue.

The company announced pre-tax earnings (EBITDA) of $9.2 million, up 31 per cent from the $7.1 million it recorded the same time last year. As at 31 December 2016, its cash balance was $13.1 million, with borrowings of $16.4 million.

In August last year, RXP Services reported a profit of $10.6 million for its financial year 2016 results ending 30 June.

In a statement on the ASX, RXP Services CEO, Ross Fielding, said the company continued to deliver “strong growth across all key metrics”, with revenue growth driven by growth in digital.

“The ongoing evolution of digital technologies continues to provide RXP with a platform for strong growth, with project-based, outcome-focused work driving the business forward," Fielding said. "Our focus on ‘design thinking and innovation has resulted in new client and project wins, including a number of ‘cross practice’ digital project wins during the first half.

“It’s pleasing to see that we have been able to maintain the evolution and expansion of our specialisations in order to meet the changing demands of clients,” he said.

In June last year, Transport for NSW selected ServiceNow and RXP Services to help upgrade its internal processes. RXP Services provided it with a shared services platform across HR, payroll, finance, facilities and project services.

Fielding also highlighted the uptake of the RXP “Experience Hub’ which opened in January, saying that clients are already leveraging its ‘design thinking’ capabilities.

“By providing an innovative, user-friendly environment for our clients to work with us, we are able to better understand their needs and provide the right customised solutions," Fielding said.

“We have also been able to implement a range of people initiatives including Diversity@RXP, partnering with BeyondBlue, and development of new leadership coaching programs. By focusing on our people, we aim to drive long-term growth and client satisfaction,” he added.

According to Fielding, the company is on track to deliver at the “top end” of its initial 10 to 15 per cent FY17 revenue guidance, with an underlying EBITDA margin target of 13 to 14 per cent.

“We will continue to evolve our organisation and our capabilities to ensure we remain well placed to meet the needs of our clients," Fielding said. "Our innovative approach to client work has enabled us to develop and maintain a strong pipeline of work in and across our specialisations and we look forward to H2 FY17 and beyond with confidence.

“In an industry that continues to consolidate our strong balance sheet positions us well in terms of pursuing further targeted acquisitions… we remain committed to our progressive dividend policy,” he added.

RXP Services’ board of directors have declared an interim fully franked dividend of $0.015 per share. The dividend will be paid on 4 April, with a record date of 16 March.

Most recently, RXP Services was awarded 2015 Partner of the Year for the A/NZ region at Informatica’s 2015 INFORM Partner Awards.

At the time of writing, RXP Services' shares were trading at $0.92.

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