New Zealand acquisitions help diversify CSG

Company reports strengthening sales pipeline

Australian IT and print services provider CSG has reported revenue, EBITDA and NPAT growth for the half year to 31 December 2009.

The company, which bought New Zealand-based Konica Minolta Business Services (KMBS) and that company's finance arm, Leasing Solutions Limited (LSL), in December recorded revenue growth of 30 percent year on year to A$111.9 million, EBITDA growth of 10 percent to $23.9 million and NPAT up 11 percent to $12.3 million.

CSG CEO Denis McKenzie said in a statement that the company’s IT services business had a strengthening sales pipeline, margins were down during the half due to new revenue at lower margins. The print services business experienced significant sales of new equipment and highly profitable churn to colour printing, McKenzie said.

The company’s acquisition of KMBS and LSL in New Zealand, and its status as preferred tenderer for two major Northern Territory Government contracts were highlights of the half, he said.

In December, CSG said KMBS and LSL were expected to generate approximately NZ$20 million and NZ$5 million respectively of EBITDA in the 2010 financial year.

The company has pursued its diversification strategy to avoid the risk associated with being tied to major clients and geographies, McKenzie said.

“We are now in the position where no single geography or relationship accounts for more than one third of profit or revenue,” he said.

The company was also on track to doubling its profit in financial year 2010, McKenzie added.

“We’re also beginning to see the Federal Government recommence spending on IT, both infrastructure and services,” McKenzie said.

CSG acquired 90 percent of KMBS for NZ$107 million and 100 percent of LSL for $25 million.

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