CSG gains in IT services

Listed IT services firms experienced a mix bag of full year results with CSG gaining ground, SMS Management & Technology slightly down and Oakton doing it tough.

The Northern Territory-based CSG announced an after-tax profit of $23.2 million, 24 percent higher than the previous financial year, built on revenues of $197.3 million.

By contrast, SMS recorded a net profit after tax of $24.3 million, down two percent, on revenues of $230.6 million.

And Oakton's net profit after tax was $14.3 million, down 48.4 per cent on the previous year. Full year revenue was $193.6 million.

CSG chief Denis Mackenzie said the Commander Managed Services acquisition had given his company a good base in the eastern states as it continued to diversify from its traditional Northern Territory base.

Mackenzie also saw "a real turnaround" in Victoria and Western Australia.

He said CSG would also invest "significantly in processes and systems" to fuel growth, particularly over the next six months.

"I'm extremely proud of the way the company has performed this year," he said. "I believe it's outstanding, and a credit to the great staff at CSG, that we've been able to grow in a year that has seen many of our competitors struggle."

SMS believed its results - only slightly down on the previous year - showed the resiliency of its business model.

SMS chief Tom Stianos said acquisitions like Pelion had enabled it to grow into other markets and maximise cross-selling opportunities.

"We plan to acquire more specialist practices in areas where we have relied on external capabilities," he said.

Stianos said revenues from utilities, mining, infrastructure and the state government had increased. Opportunities in the consulting and technology services business units also meant SMS had restarted recruitment in those areas.

Oakton, meanwhile, reiterated its guidance to the market in February pointing to significant problems stemming from the financial crisis and reduced Federal Government IT spending.

Chief executive Neil Wilson said changes from an operational review - which has seen staffing levels reduced to 1157, down 132 people on the previous year - had "favourably impacted the second half results and in particular the last quarter.

"Key indicators [in the last quarter] have returned to levels of prior years," Wilson said.

Marina Beale, a senior research analyst for IT services at IDC, believed the local sector had "shown signs of standing up to the global financial crisis.

"I'm not saying that Australia hasn't faced its challenges locally," Beale said.

"Many vendors have responded by restructuring the way they engage the market and have addressed their own costs."