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DWS sees $20M revenue rise while profit takes a hit

Projects Assured acquisition plays major role in half year revenue results
Danny Wallis (DWS)

Danny Wallis (DWS)

DWS Group net profit after tax (NPAT) fell 34 per cent to $6.7 million in the first half of the 2019 financial year, or $3.4 million down compared to the previous corresponding period.

The company told shareholders that the drop in NPAT was due to acquisition-related costs, plus investment in licensed products and robotic process automation (RPA) totalling around $3.3 million.

The publicly-listed company saw a $20 million revenue rise for the six months ending 31 December 2018, citing its $43 million acquisition of Projects Assured as a driving factor.

Its half-yearly earnings saw the IT services company rein in $82.2 million, a rise of 33 per cent.

While Projects Assured put in a ‘strong performance’ for the half-year period, DWS revenue from industries such as banking, IT&C and utilities dipped owing to lower than expected demand.

Previously banking accounted for 43 per cent of DWS’ revenue, but has since sunk to just 13 per cent in the wake of the Royal Commission.

The results were reflected in DWS’ staffing; the company has increased its consulting headcount from 704 at the end of the last financial year to 763.

However, DWS admitted that the rise was driven by an increased number of consultants from Projects Assure, while headcount for DWS traditional services’ consultants was reduced.

Meanwhile, digital work from DWS Group was said to be performing behind expectations owing to tight labour conditions. DWS said it had installed a new management team to increase the proportion and performance of digital work by the Group and increase its margins.

“Our revenue grew strongly during the period with some organic growth and a strong contribution from Projects Assured,” CEO and managing director Danny Wallis said.

“DWS was impacted by variable and lower than expected demand in the banking and finance sector and lower than expected demand in the IT&C and utilities sectors which led to lower staff utilisation.

“In response, we have continued to invest in licensed products and Robotic Process Automation as well as supporting Projects Assured in their growth.”

At the end of the last financial year, DWS reported a NPAT of $15.9 million, a 8.5 per cent dip from the previous year. Full-year revenue was also down by $11.3 million, falling to $126.1 million.