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CSG reveals net loss of $43M after print business writedown

CSG reveals net loss of $43M after print business writedown

Plans launch of cloud-based business application suite in CSG Cloud Marketplace for 2018

CSG managing director and CEO, Julie-Ann Kerin

CSG managing director and CEO, Julie-Ann Kerin

CSG (ASX:CSV) has reported net profit after tax loss of $43.7 million after writing off $55 million of goodwill associated with its print business in early August.

CSG total revenue was $244.5 for the 2017 financial year, or a one per cent decline compared to the previous year.

The technology-as-a-subscription service introduced in 2015 has grown representing 17 per cent of the company’s revenue in the financial year ended 30 June 2017.

“We expect this to increase to approximately 25 per cent in FY18 and we are confident that our technology-as-a-subscription strategy has enormous growth potential,” CSG managing director and CEO, Julie-Ann Kerin, said.

According to Kerin, the company has seen strong uptake in technology subscription seats with total contracted seats of 27,300 at 30 June.

“This represents a growth of 104 per cent relative to the prior corresponding period (excluding the impact of acquisitions completed during the year),” Kerin said.

The Enterprise Solutions Australia saw revenue growth of three percent, but was still $7 million lower than expected due to a shortfall in transactional equipment revenue from two contracts.

The company has gone through a management restructure bringing in IBM’s general manager strategic sales Paul Wilson to take on the chief sales officer role. Wilson was responsible for IBM’s digital, cloud and mobile business solutions across A/NZ with $300 million of sales across enterprise and mid-market customers in four key sectors.

The company created the general manager service delivery role and hired former NEC Mark Jobsen. CSG also appointed Gary Brown as chief financial officer, Tom Wilcox as general counsel and company secretary and Michelle Morrison as group treasurer & general manager finance solutions. Vanessa Harford was appointed general manager marketing.

CSG has entered into a partnership with the Bank of New Zealand (BNZ) where CSG will become a member of its Business Essentials Program to recommend technology-as-a-subscription offerings to BNZ small-to-medium enterprise customers.

CSG expects a revenue growth of 10 per cent for the 2018 financial year with EBITDA of $30 million. The company also plans to develop partnership with HP across Australia and New Zealand and launch a cloud-based business application suite in CSG Cloud Marketplace.

In June, CSG acquired New Zealand managed IT services provider, pcMedia for a total price of NZ$2 million, and earlier in the year, it acquired Brisbane-based managed services provider R&G Technologies for $6.6 million.

Together, these two acquisitions bring additional managed IT capabilities, including Tier 1 Microsoft Cloud Solutions Provider status in New Zealand, and materially increase the number of subscription seats CSG has under management.

 


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