Melbourne It Sees More Growth And Bright Year Ahead

The Age

Wednesday August 20, 2008

Garry Barker

MELBOURNE IT chief executive Theo Hnarakis says the company is on track to deliver its sixth consecutive year of double-digit growth in revenue and profit.

Despite the impact of the Australian dollar's recent high value against the greenback, (more than 60% of Melbourne IT's business is offshore) the first half, ended on June 30, shows a 12% increase in revenue to $86.7 million, half on half.

EBIT was up 29% to $11.6million. Operating cash was up 12% to $13.7 million over the comparable half of 2007 and deferred gross margin was up 18% to $26.8 million. Net profit after tax (NPAT) was up 20% to $7.8 million.

"We are forecasting that the second half of this year will outperform the half we are reporting," he said.

The board declared an improved fully franked interim dividend of 7 a share.

While the company was tracking well and the outlook for growth, particularly in IT-related services, was good, Mr Hnarakis said he was "not complacent about our position or historical success".

"We have invested in Advantate (the joint venture with Fairfax Digital that is just beginning operations) and in the recently acquired Verisign digital brands services (DBS) business that is now being integrated into Melbourne IT," he said.

"We are investing in systems (to support those enterprises), have spent close on $5 million so far and are flagging we will spend a similar amount going forward. Culturally we have to do that for our future survival.

"We want to be a great company (globally) and the way we will do that is by investing in these systems and infrastructure projects. We believe that there will be a greater appetite for services from both SMEs and corporates going forward.

"So we need to get our systems right, which will give us a competitive advantage and the ability to provision still more services, and to do that so efficiently that we generate significant profits."

More than half the company's revenue comes from services.

MELBOURNE IT

HALF-YEAR RESULT

Net profit: $7.8m +s20%

Revenue: $86.7m +s12%

Dividend: 7, fully-franked

DIVIDEND PAYMENT DAY: OCTOBER 17

© 2008 The Age

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