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Canon print acquistion boosts CSG results

Revenue growth of 39.9 per cent year-on-year to $388.6 million, and net profit after tax growth of 26.2 per cent to $40.4 million.

The acquisition of Canon’s print services group has helped IT services company CSG (ASX: CSV) record solid increases in revenue and profit for the year to 30 June 2011.

In an ASX statement, the company said it recorded revenue growth of 39.9 per cent year-on-year to $388.6 million, and net profit after tax growth of 26.2 per cent to $40.4 million.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 18.5 per cent to $70.3 million.

The company’s Technology Solutions business reported revenue of $165.2 million for FY11, up from $157.3 million in FY10. EBITDA was $39.1 million, down from $42.7 million over the same period.

The Print Services business reported revenue of $222.8 million for FY11, up from $120.2 million in FY10. EBITDA was $42.4 million up from $24.0 million over the same period.

In March, the company forecasted a full-year profit of between $38 million and $42 million, and said its key businesses were growing despite the impact of recent disasters in Australia and New Zealand.

“The past year has been focused on achieving a solid foundation for national organic growth in the future, as demonstrated through the integration of the newly-acquired Canon business and the business reorganisation in [the Technology Solutions division],” CSG managing director, Denis MacKenzie, said in the statement.

“The improved earnings for the year reflect the full-year impact of the New Zealand print business acquired in FY10 and the impact of the Canon business.”

During the last half of the financial year, the company said it would raise $40 million in new equity through a rights issue and an entitlement offer.

In April, CSG said it intended to place $10 million worth of shares to institutional investors and conduct a one-for-nine rights issue to raise the remainder.

Looking toward the 2012 financial year, the company said it expected an improvement in the underlying performance of its Technology Solutions and Print Services New Zealand businesses during the year.

“Technology Solutions has a solid forecast revenue of multi-year contracts from increased annuity contracts, continued growth in Oracle hosted business applications and the close of contracts for CSG replicable solutions,” the statement reads.

“Print Services New Zealand is forecasting future revenue and profit growth through increased equipment sales, MIF (machines in field) and colour volume.”

The company has so far won an ICT overhaul deal with Western Australian manufacturing and construction firm AGC. The deal will help eliminate the paper-based systems currently in place to systems that automate processes and provide accurate information promptly.

Follow Tim Lohman on Twitter: @Tlohman

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More about: Canon, CSG, Oracle, Technology, Technology Solutions
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