Empired has incurred a $15 million loss despite posting modest revenue growth and meeting expectations due to a major write-down of its software assets.
In an ASX announcement (pdf) for its 2019 financial year results, chief executive Russell Baskerville told shareholders that the year ended 30 June 2019 had been “a challenging year” for the business, but is confident in the company’s outlook.
Empired reported revenue of $176 million, up 1 percent from the 2018 financial year, as well as a $15.3 million loss, including a non-cash impairment charge of $25.4 million.
Baskerville did not go into specifics, but said the write-down largely relates to software assets “that are now being superseded through new technologies and changes in market trends”.
The company is currently undergoing a “comprehensive” review as it looks to reduce costs and increase revenue, according to Baskerville.
“Empired is well placed to benefit from the continued growth in the IT sector, especially with the growing trends that are today dominated by the adoption of technology to support business growth and transformation,” Baskerville said.
On a per-segment basis, Empired saw 65 percent user growth in its Cohesion SaaS platform, its proprietary Azure-based system for the provision of enterprise content and collaboration management, from 7000 to 11,500 users. Its Microsoft Dynamics business also grew 20 percent and remains the company’s highest margin business. The company also scored a number of large, multi-year contracts with the New Zealand government.
Earlier this month, Empired lost a managed services contract with Main Roads Western Australia, with ASG Group scooping up the $75 million deal.