Volante reports $14.1m profit after restructure

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IT services and solution provider Volante has reported a profit after tax, before amortisation, of $14.1 million on $443 million in revenue for the year to 30 June 2005.

IT services and solution provider Volante has reported a profit after tax, before amortisation, of $14.1 million on $443 million in revenue for the year to 30 June 2005.

Ian Penman, chief executive of Volante Group, said the company's simplified structure had contributed to the positive results.

"We are strengthening operational and financial systems and processes to improve customer service and help increase profitability," he said in a statement.

"Our strategy to build Volante's services business resulted in services contributing over 50 percent of earnings for the first time."

That trend was expected to continue on the back of further cost reductions, including an expected loss of 50 more staff in the near future, Penman suggested.

The last financial year saw Volante review all operations and simplify the Group into three business units: professional services, managed services and product solutions. Its global remarketing business was sold off.

The company had also strengthened its management team, Penman claimed.

"This has been a year of transition for Volante," he said.

Penman was appointed chief executive in October last year. Since then, several other new executives were appointed, including chief financial officer Stephen Rorie, who took the reins of that role in March, and former Citec boss Mark Rainbird, who became Volante's director of services in May.

The company acquired boxbuilder Ipex in February 2004. "In addition to 12 months' revenue and amortisation from Ipex, 2005 results included a catch-up charge of $638,000 following the decision to shorten the amortisation period for Ipex' intellectual property," Volante said in a statement to the ASX.

That period had been shortened from 15 to five years for 2005. This year's results also included a charge of $680,000 after tax, related to the restructuring.

Last year's results also included a one-off tax credit of $695,000 created on the restatement of deferred tax balances on the implementation of tax consolidation, the company said.

"Our principal focus is to make Volante the company our customers what to work with, ICT specialists want to work for and investors want to own," Penman said.

"We intend to achieve these goals through delivering excellent service across all our lines of business, increasing investment in our employees' training and development and continuing to contain costs while targeting profitable growth."

Meanwhile, demand for IT services was expected to continue this coming year, he said.

Operating activities cashflow was $36.8 million for the year ending 30 June 2005, up from the previous year's $25.1 million. Volante worked to better manage its working capital.

It spent $20.2 million in capex during the 2004-05 year, including on its G8 government contract refresh costs. The next G8 desktop refresh was in 2008, Penman said in a presentation to investors.

"Our plan is for our three lines of business to grow faster than market rate. Two hundred to 5000 seats is our target market," Penman said. "Customers are increasingly appreciating the advantages of our ‘agnostic’ approach to solutions."

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