ASX-listed channel company Volante Group has predicted its 2002/03 fiscal year profit (after amortisation and tax) will reach $4 million, only slightly lower than its $4.3 million profit in the previous financial year.
The company reported that corporate IT spending was again soft in the six months to June 30, with sales revenue for the year ($324 million) slightly down on the previous year ($365 million).
Volante group managing director, Allan Brackin, said the company had done remarkably well considering the circumstances. The company will write $600,000 off the balanced sheet in fixed assets after it consolidated its premises during the reporting period. Upon merging Volante with AAG in November 2000, the company resided in as many as 15 locations but has consolidated to just one building per state. Brackin said the write-downs are attributable to some of the excess IT gear in the abandoned buildings, some of which were over-valued. “With these one-off expenses taken into account, I would say we actually did 300-400k better this year at an operational level,” he said.
In order to still deliver shareholders a dividend in such a soft period, the company has engaged in a cost restructuring exercise over the 12 months which has reduced the company’s annualised cost base by around 15 per cent.
Brackin said the group was bidding on several large deals but had no sure things in the bag. The previous financial year included a $12 million deal with Santos, a $9.4 million with the federal department of finance and administration, and two $6 million contracts with a business consultancy group and a large insurance organisation. Brackin said he is hoping for a repeat performance in the selective outsourcing space this year. “I am hoping the refresh will be more buoyant – I wouldn’t bet my life on it, but one would have to expect some spending.”
Brackin also said that while project work around storage, disaster recovery and wireless networks are likely to pick up in the coming twelve months, any recovery in the IT sector would instead be lead by a general refresh of outdated systems.