Empired eyes earnings boost as pipeline begins to flow

Empired eyes earnings boost as pipeline begins to flow

Flags rise in pre-tax earnings and revenue

Russell Baskerville (Empired)

Russell Baskerville (Empired)

Credit: Empired

Perth-headquartered publicly listed IT services provider Empired has flagged an expected surge in first half pre-tax earnings and host of new work coming through the pipeline.

The company told shareholders on 23 November it expected first half earnings before interest, tax, depreciation and amortisation (EBITDA) in the range of $15.8 million to $16.5 million, up from $7.8 million reported in the first half of the prior financial year.

At the same time, the company said it expected first half revenue to be in the range of $87 million to $89 million, up from $84 million in the corresponding half the year prior. 

The expected results come as Empired eyes a sales pipeline that is currently up 40 per cent on the previous corresponding period and forecasts that indicate a record first half sales results.

The company has also flagged a strengthening pipeline and a number of strategic contracts to be contested over the coming 12 months.

“We have been delighted with the progress made in ramping up services relating to a number of key contract wins over the prior six months,” Empired managing director Russell Baskerville said. “In the face of challenging conditions our team has transitioned and commenced service delivery ahead of time and in line with anticipated financial performance.

“This, combined with pleasing earnings growth across the Australian east coast, and an outstanding performance from our New Zealand operations provides confidence in our solid first half guidance and continued growth into the second half,” he added. 

According to Baskerville, the company believes its Microsoft partnership, along with its investments in managed services and its digital services portfolio, are key drivers to record sales opportunities across the regions in which the company operates and its ability to compete and win in large, multi-year strategic contracts.

“I’d like to acknowledge our staff for their tremendous effort through a challenging time and the critical support that our partners and clients provide as we pursue the goal of building the most respected digital services company across the A/NZ region,” Baskerville said.

In August, Empired revealed it had returned to the black for the full year ending June 30, aftervowing to cut its costs and capital investments last year to offset a $15 million loss.

The publicly listed company posted a profit after tax of $6.1 million, a rise of 139 per cent, despite revenue falling by six per cent to $166 million.

Australian revenue in particular took a hit, falling by 16 per cent, with the company having lost its Main Roads WA,which was expected to impact its FY20 revenue by $10 million.

However, a return to growth in the company's New Zealand business, Intergen, where revenue rose by 11 per cent, offset the overall decline.

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