RXP Services’ profits bounce back after digital shift
- 21 February, 2019 10:30
IT services provider RXP Services has posted a seven-per cent profit rise for the half year ended 31 December.
The publicly listed company saw its net profit after tax (NPAT) increase from $4.2 million to $4.5 million from the corresponding period last year.
Revenue in the first half of the 2019 financial year also grew by nearly two per cent, rising from $70 million to $71.3 million.
According to its Australian Securities Exchange (ASX) update, RXP underwent a ‘business review’ that sparked a 280 per cent rise in redundancy costs. However the company said the headcount split across regions was relatively stable counting on 715 people as of 21 February, down 40 people from 30 June 2018.
The review saw RXP's cost structure "aligned to reflect the demand in digital work", as the company moved to a "regionally focused operational model".
In reference to the increased redundancy costs, RXP added that it had restructured its Hong Kong operation to "better match client demand".
Off the back of the changes, the company saw its digital transformation-related work increase by 36 per cent, telling shareholders digital services now comprise 80 per cent of revenue.
The bounce-back follows a challenging 2018 financial year for RXP when its NPAT plummeted by 33 per cent to $7.8 million.
At the time, the company claimed the anticipated decline in traditional consulting work across two major clients had significantly impacted its bottom line.
However, the company said it had recently won a number of new digital contracts with Toyota, Peugeot, Smith Family, Sydney Bridge Climb, H&R Block, which were in part driven by the 2017 acquisition of creative agency The Works.
In addition, RXP also scooped a $6.8 million contract to provide customer relationship management (CRM) and services portal to the Victorian Department of Health and Human Services (DHHS).
Meanwhile, the company recently made a number of new hires to boost its customer experience business. These included Adam Donnelley, who joined as group chief strategy officer and Charles Agee as its group executive for the Southern Region (Victoria and Tasmania).