Cirrus Networks has weathered a 280 per cent year-on-year fall in after tax profit for the six months ending December 2019, clocking a $234,666 loss for the half year as it works to ramp up its managed services business.
By contrast, Cirrus previously reported an after tax profit of $135,287 in the six months ending December 2018.
According to the publicly listed company’s latest financials, the after tax profit figure was impacted by amortisation and depreciation, and one-off redundancy costs associated with business review and restructure of $32,881, as well as and foreign exchange of $30,355, among other factors.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) for the half year came to $863,502.
Operating cash flow for the half, meanwhile, was a “disappointing” outflow of $1.49 million, the company said. This was due to the timing of receipts and payments around the Christmas close period, along with some tightening of vendor and distributor credit terms during the half.
Regardless, the company was upbeat about its interim results, telling shareholders it was pleased to announce another “solid half year result for H1 FY20,” as it continues its journey to become “a managed services provider of choice within the Australian IT sector”.
“The [fifth] consecutive year of H1 revenue growth is very pleasing and demonstrates that Cirrus remains on track to deliver on our strategic goal,” Cirrus managing director Matt Sullivan said, referring to the five per cent year-on-year increase in revenue the company saw during the period.
“As the Company matures, its ability to deliver top line growth while maintaining profitability is a credit to our quality staff and their ability to meet and exceed the client expectations.
“Of particular note is the 22 per cent growth in managed services revenue,” he added. “This together with the ongoing contribution of our eastern seaboard businesses and continued strong market position in WA [Western Australia] demonstrates Cirrus’ evolution into a market leading and innovative national IT managed service provider of choice.”
The company told shareholders that the growth in its higher-margin managed services revenue contributed to the “solid earnings” result with the business on track to be “nationally recognised as an innovative IT solutions provider and market leader in enterprise managed services”.
In December last year, Cirrus Networks became the latest managed service provider to win a contract with Australian mining giant Rio Tinto.
The Perth-based company has won a three-year deal to join the Asia Pacific west IT vendor ecosphere consultancy panel, which will enable it to bid for IT infrastructure services with Rio Tinto.