WebCentral acquistion drives Melbourne IT growth

Greater than expected synergies from its WebCentral Group acquisition have helped Melbourne IT record strong growth across its business.

For the financial year to 31 December 2006, the services provider recorded revenues of $103.8m, up 42 percent year on year.

Net profit after tax, excluding the sale in March 2006 of the company's 10 percent stake in .biz registry Neulevel, increased 19 percent to $6.4m

Operating cash for the period grew 38 percent to $11.3m, and deferred gross margin grew 38 percent to $21.0m.

Commenting on the results, Melbourne IT CEO and managing director Theo Hnarakis said all the company’s divisions had outperformed expectations.

"A key achievement in 2006 was the successful acquisition and integration of WebCentral Group,” he said in an ASX statement.

“This transaction has lifted Melbourne IT to a new level as a technology services company, increasing our customer base, enhancing our capabilities in areas such as Software as a Service and virtualisation and creating significant opportunities to grow our business."

Melbourne IT's reseller division recorded revenue increasing 21 percent to $43.9m and its contribution margin up 45 percent to $4.1m.

Revenue in the corporate brand services division was up 29 percent year on year to $14.1m although its contribution margin was down 3 percent on 2005 to $0.95m

The business and consumer division reported a contribution margin up 29 percent to $5.1m on revenue of $25.6m, which was up 5 percent year on year.

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