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Steady as she goes for KAZ Group

Steady as she goes for KAZ Group

ASX-listed KAZ Group has met its forecasts for revenues, earnings before interest, tax, depreciation and amortisation (EBITDA) and net profits in a steady year of consolidation.

But the company is still keeping tight-lipped concerning the progress of a hunt to find a new CEO to fill the shoes of founder and present incumbent, Peter Kazacos.

KAZ announced revenue from ordinary activities during the year ending June 30 of $355.6 million (up from $251.9 million in the 2002 financial year), EBITDA of $33.8 million (down from $35 million) and a net profit after tax of $1.5 million (down from $10.2 million).

Kazacos said the jump in revenue was mostly attributable to the acquisition of Aspect Computing, which had now been on board for a full year. He blamed the small profit after tax on the way goodwill is treated, claiming EBITDA was the real comparison figure and had only fallen slightly from the previous financial year.

He said the EBITDA figures had been impacted by $1.7 million in redundancy payments, $1.4 million in software carrying value write-down and $400,000 in restructuring costs.

“One reason we have had to make staff reductions is that we haven’t had people in the state where there has been demand for them,” he said.

“We should be able to balance the states better. I have put the challenge out for managers to use people interstate and improve that utilisation.

For example, application development has been down in Victoria but it is up in NSW and ACT. Victoria currently has more demand for mid-range outsourcing.”

As previously reported in ARN, KAZ Group reorganised earlier this year into three units – technology services (which had revenues of $258.6 million in the 2003 financial year), business services ($98.5 million) and software solutions ($14.2 million).

Kazacos refused to be drawn on how long it would take to find a new CEO but said interviews had taken place.

He also refused to comment on whether this year would see an industry upturn.

“We can’t really say we are out of the woods yet but it has been better during recent months,” he said. “That may be down to end of financial year replacement, which is good but it is not a technology wave like we saw with Y2K or the Internet.”

For more on this story, see this week's edition of ARN.


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