CSG braces for weaker print equipment sales

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CSG braces for weaker print equipment sales

CSG's continued push towards becoming an end-to-end managed IT provider has resulted in lower-than-expected print equipment and enterprise solutions sales and revenue dragging down.

The company revised its sales forecast down from $269 million by $9-12 million for the 2018 financial year.

It now expects revenue of $253-$260 million for the 2018 financial year. Underlying earnings were also revised down from $30 million to $18.5-$21 million, which didn't factor in a $4.6 million hit to earnings from non-recurring items.

CSG said that the lower print sales were due to changes to its sales force and sales incentive programs in order to grow its technology business. Chief executive Julie-Ann Kerin said the technology business was expected to represent 25 percent of CSG's revenue by the end of the financial year.

"While we are disappointed with our print sales execution, we are pleased with the strong growth in technology with high value subscription seats closing at 19,184 as at 31 December 2017, representing organic growth of 44 percent relative to the prior corresponding period," she said.

Lower enterprise solutions were similarly pinned on the growing managing IT pipeline.

Late last year, CSG hired former IBM sales executive Paul Wilson to lead its enterprise solutions business, which includes the private cloud platform, procurement marketplace, managed print, end-user computing, cloud communications and display solutions.

Last year also saw CSG write down $55 million in goodwill from its print business. The company has endeavoured transition from a managed print business to an end-to-end managed IT provider over the past three years.

The company also announced it has enlisted Morgan Stanley to help review strategic options to maximise shareholder value.

CSG entered a trading halt on Tuesday pending the announcement, with shares trading at 44 cents at the time. The share price has dropped to 30 cents since the halt was lifted this morning.

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