Empired still reeling from loss of major contract

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Empired still reeling from loss of major contract

Managed services provider Empired is still feeling the effects of losing the Main Roads Western Australia contract to ASG Group last year, posting a slight decline in revenue and profit.

In the half-year ended 31 December 2019, revenue was $84.4 million, down 5 percent from $88.6 million the previous year. Net profit after tax was $2 million for the period, down 10 percent from $2.24 million.

The declines come despite landing new managed services contracts in November 2019, as well as 20 percent revenue growth from its New Zealand business.

In an ASX announcement (pdf), Empired chief executive Russell Baskerville said that while revenue was down, the results are in line with company expectations.

“We are very pleased with our strategic progress on reducing overhead costs, capital expenditure, net debt and significantly improving our cash flow,” Baskerville said.

“...during the half we renewed a material contract with Rio Tinto and secured $5 million per annum in managed services contracts that will contribute to revenue in the second half and beyond.”

Looking ahead, Empired expects increases in both net profit and earnings, with second half EBITDA forecast to be higher. Capital expenditure is also expected to be reduced by $5 million year-over-year.

The company also revealed that it is in negotiations with a number of contracts, which are expected to deliver “significant” revenue growth into FY2021 if successful.

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