DXC Australia turns a profit after year hit by merger costs

DXC Australia turns a profit after year hit by merger costs

Books pre-tax profit from continuing operations of $8.92 million

Credit: DXC Technology

After a year hit by costs associated with its landmark merger of CSC and HPE’s Enterprise Services business, DXC Technology’s Australian branch has finally turned a profit. 

DXC Technology Australia Holdings’ annual financials for the year ending March 2019, lodged with Australia’s corporate regulator on 31 January, revealed that the company registered a pre-tax profit from continuing operations of $8.92 million.

This is a far cry from the pre-tax loss from continuing operations of $20.53 million it booked the year prior, largely due to expenses involved with the integration of CSC and HPE’s Enterprise Services business, which together became DXC Technology following their landmark merger in 2017

As reported by ARN in September last year, DXC Technology’s FY18 financials were hampered by $68.10 million in goodwill charges and restructuring costs of $56.20 million, both related to merger and integration costs, adding up to $124 million in one-off expenditures and provisions.

While profit was up for DXC during its 2019 financial year, the company’s revenue from continuing operations for the year ending 31 March 2019 fell by roughly 1 per cent, to almost $2.32 billion from the previous year’s tally of almost $2.35 billion. 

According to the financial document, the decrease in revenue reflects DXC Technology’s ongoing migration out of legacy infrastructure environments, partially offset by growth in the company’s cloud infrastructure, enterprise and cloud applications, and digital workplace offerings.

In May 2018, DXC Technology revealed its business in Australia pulled in revenues of just over US$1.69 billion ($2.26 billion) for the company’s financial year ending March 2018, topping off a lengthy period of acquisition and consolidation for the company.

DXC Technology’s 2019 financial year also saw it acquire Melbourne-headquartered Microsoft partner Sable37, in a move bolstering the integrator’s position as one of Microsoft’s leading global partners for Dynamics 365. 

More recently, in January this year, DXC Technology confirmed it had offered technical and support positions to former employees of Arxxus Technology Partners after it entered administration.

"This will further strengthen our Salesforce capability which is a strategic practice for DXC. We also look forward to the opportunity to work with Arxxus customers," a DXC spokesperson said at the time. 

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