Cirrus Networks pumps revenue up 41 percent thanks to Correct Communications acquisition and contract wins

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Cirrus Networks pumps revenue up 41 percent thanks to Correct Communications acquisition and contract wins

Cirrus Networks has added $22.2 million to its revenue in the past 12 months thanks to a steady streamline of multi-million-dollar contract wins and a successful acquisition integration.

The Perth-headquartered IT solutions provider posted its unaudited results for the fourth quarter of the 2018 financial year ending 30 June. Quarterly revenue was up to $24.6 million, which would pump full-year revenue up by 41 percent to reach $76 million.

The company said its services revenue climbed 130 percent year-on-year in 2018 to $19 million, which now makes up 35 percent of its total gross margin.

Cirrus said it was in its third year of a five-year business transformation and geographic expansion plan, which included buying former CRN Fast50 winner NGage Technology Group for $2.5 million in 2017 to expand its Victorian presence.

"With a strong cash position and continued positive pipeline of opportunities, Cirrus remains on track to deliver on its 2020 strategic aspirations" the company said in a statement on the ASX.

Cirrus also gave an update on the status of its most recent acquisition, Canberra-based IT solutions provider Correct Communications, which Cirrus acquired in November last year for up to $5 million, dependent on performance hurdles.

Cirrus said at the time that it would merge its existing Canberra business with Correct to form a new managed services provider called Cirrus Canberra – giving Correct government supplier panel status.

The company said Correct had performed above expectations in the most recent quarter and as a result, will pay out the maximum $5 million price tag, representing 3.92 times Correct's most recent earnings.

Cirrus has already paid $2 million in cash to Correct, and will pay another $1 million in cash and $2 million in either shares or cash, based on Cirrus' discretion.

Cirrus has also racked up a handful of multi-million-dollar contract wins in the past financial year. Most recently, the company won a $2.5 million managed services deal with Crown Melbourne and Perth to manage their data networks and voice infrastructure for the next five years.

In January, Cirrus won a managed service contract with the Peter MacCallum Cancer Centre to manage network services, including IP network carriage and telephony services, across the organisation’s new Victorian Comprehensive Cancer Centre (VCCC) building.

Two months later, Correct won a $1.6 million supply contract with the Australian Trade and Investment Commission to provide network equipment and associated maintenance and support.

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