Solutions provider ASG Group has let go 50 staff as part of an aggressive restructuring program to transform itself from a traditional IT reseller into a cloud services provider.
The company said the redundancies would cost it $1 million but save it many times that over the coming years.
It announced a write-down of $14.9 million related to legacy assets and capitalised contract establishment costs. It will pour a further $1 million in another review into accounting policies relating to costs deferral, capitalisation and amortisation with major contracts. That review is expected to be completed in the second half of FY13.
ASG Group CEO Geoff Lewis said the company had suffered from a weak market for traditional IT services, and was now turning its attention to the cloud.
“We remain convinced that the trends towards new world computing are real and are gathering momentum,” he said in a statement.
“However, we also acknowledge that our approach to the implementation of the necessary changes with ASG and its business development activities to support a dual strategy of new world computing and traditional managed services has been too ambitious and needs to be adjusted.”
ASG revealed today that acquisition talks flagged last year with an as-yet unnamed bidder remain ongoing.
It said it had also received offers from separate parties and had “engaged in discussions with potential to generate alternative proposals.”
The company entered a trading halt mid-October last year reporting that it received an offer of $1.03 a share, a $0.36 premium at the time, valuing the company at $177 million.
For the 2012 full year it reported a $3 million fall in revenue to $150.3 million. It expects EBITDA for the first half of 2013 to come in at $13 million.