DWS sales plummet by $15 million

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DWS sales plummet by $15 million
DWS non-executive chairman Danny Wallis

ASX listed services firm DWS has recorded a 25 percent fall in earnings before interest, tax depreciation and amortisation (EBITDA) for the 2014 financial year, finishing with $18.21 million.

While the company's balance sheet and overall business "remains strong", revenue also fell $14.6 million to $94.4 million and net profit down 23 percent to $12.9 million.

DWS blamed the result on "difficult" trading conditions, with clients continuing to focus on cost with reductions in capital expenditure across most industries.

Resources revenue fell due to the discontinuation of a joint venture with Borealis. Announced in February 2013, Borealis DWS Consulting Services was setup to deliver IT services to the mining, oil and gas industries.

With the end of the joint venture, DWS is now acting as a Borealis delivery partner in Australia. Revenue from IT&C and transport declined, partially due to completion of large work programs.

DWS expects an overall improvement in the 2015 financial year, but general demand remains "subdued".

The results come amid various changes at the Microsoft, IBM and AWS partner. In March it announced the completion of an executive change - founder Danny Wallis retired as CEO and moved into a non-executive chairman role. Former CFO Lachlan Armstrong was appointed new CEO and managing director.

Meanwhile, consultant numbers are down from 535 to 490. DWS has also restructured its NSW and Queensland management teams.

DWS has created a new cloud practice, with "strong demand" for cloud migration strategy and implementation.

The provider cites cloud, business analytics and digital solutions as areas where demand is strong - revenue increased by $3.13m in each of these areas. The company will continue to invest in these areas, as well as managed services.

Demand is also strong from the banking and finance sectors, while revenue from Defence and healthcare has also increased.

Acquisitions are also on the table - DWS reports it is seeking EPS accretive acquisitions.

Today's results were described as a preliminary report, with accounts currently being audited.

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