Melbourne IT reports strong earnings following business transformation wrap up

Melbourne IT reports strong earnings following business transformation wrap up

The managed service provider posts $10.7M in net profit for the year.

Martin Mercer - Melbourne IT CEO

Martin Mercer - Melbourne IT CEO

Managed service provider, Melbourne IT, has reported a net profit after tax (NPAT) of $10.7 million for the year ending 31 December 2016, representing a 91 per cent increase on the previous year.

The company declared, in a statement on the ASX, that its results follow the end of a three-year quest to transform its small to medium business (SMB) and enterprise services divisions, and integrate recent acquisitions.

Melbourne IT CEO, Martin Mercer, said the “painstaking” job of rebuilding and transforming the organisation is now complete.

“The future will be characterised by by innovation and accelerating organic growth,” he said.

The company also reported a revenue of $168.4 million, a 12 per cent increase on its previous financial year. Earnings were also up, with the company posting a 71 per cent increase on last year, to $28.2 million.

Melbourne IT also said it achieved $8.5 million of the $10 million in forecast savings from the integration of two recently acquired companies, Netregistry and Uber Global. The company also added that it had “clear sight” of the remaining $1.5 million in forecast savings.

Melbourne IT acquired web hosting company, Netregistry, in February 2014 for $50.4 million in cash and shares. A year later, the company bought cloud services provider, Uber Global, for $15.5 million.

The MSP added that its SMB division was growing and that it now has a new focus on managed marketing solutions, which accounted for 20 per cent of divisional revenue at a 56 per cent year on year growth rate.

The company also said its enterprise services division has tripled in size in the last three years. In 2016, the division’s revenue grew 73 per cent and earnings before interest, tax, depreciation, and amortisation grew 87 per cent.

“We are confident in our ability to drive growth and profitability at Melbourne IT,” Mercer said.

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Tags enterprisesmbMelbourne ITMartin Mercer

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