Empired adds $30m revenue, despite share price tumble

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Empired adds $30m revenue, despite share price tumble
Russell Baskerville

National solutions provider Empired has grown its revenue by $30 million in the 2016 financial year, to reach $160 million.

That represents 25 percent growth in annual revenue, despite a rough year with its share price dropping from $0.76 cents on 1 July 2015 to $0.46 cents at close of trading on Wednesday.

The stock price on the ASX picked up after the results announcement Thursday morning, going as high as 49 cents at 11am.

Earnings before interest, tax, depreciation and amortisation was down 25 percent to $8.2 million, in contrast to 94 percent growth last year.

Empired managing director Russell Baskerville said: "Following significant integration activities and disappointing earnings in the first half we are pleased to report a strong recovery in the second half."

CRN previously reported transitional difficulties for Empired in the first half of 2016, including restructure of the Australian sales team (costing $4.1m), delays in commencements of contracts ($1.1m), and plan and equipment write-down ($2.3m).

"Importantly we have experienced pleasing operating cash flow in the second half significantly reducing our net debt level," said Baskerville.

The company's operating cash flow was $11.6 million for the 2016 financial year, up from 2015's $5.1 million. Net debt was $25.6 million, reduced from $33.2 million on 31 December 2015.

Digital services were up 132 percent in revenue, Microsoft Dynamics services up 31 percent and data insights grew 27 percent. Empired also reported "strong" organic growth infrastructure services.

Empired has been growing annuity revenue from its cloud-based software-as-a-service Cohesion and platform FlexScale.

"High levels of contracted revenue, a healthy sales pipeline and services aligned to growth segments of the market provide us confidence in delivering a strong financial performance in the coming year," added Baskerville.

According to a letter to shareholders filed with the ASX, the company attributed the weak first half to consolidation, acquisition integration and organisation alignment.

Empired is number 13 in the current CRN Fast50, having recorded 92 percent growth in 2015 to reach $128 million of revenue.

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