WebCentral Group Reports Strong Financial Results

HostReview.com
Tuesday, September 6, 2005; 02:34 PM

Australian technology company, WebCentral Group Limited (www.webcentral.com.au) announced a 219% increase in net profit after tax to $5.0m and a 336% increase in revenue to $58.4m for the 2004-05 financial year. These results reflect the Group’s full ownership of WebCentral Pty Limited and underlying revenue growth of 16%.

EBITDA for the period was up 381% to $15.2m from $3.2m in the previous financial year. Earnings per share (EPS) for the year climbed to 13.1¢ from 4.4¢, while diluted EPS grew to 12.5¢ from 4.3¢ at 30 June 2004. The Group’s cash position remains strong at $3.5m.

In announcing this strong full year result, WebCentral Group CEO, Andrew Spicer, said: “The first full financial year after the WebCentral acquisition has seen us not only achieve an extremely solid financial result but successfully evolve into a much stronger, more scalable company. The acquisition of the remainder of WebCentral has lifted WebCentral Group to a new level as a technology services company.”

The substantial improvement in the Group’s results was largely attributable to the consolidation of the WebCentral Pty Limited investment, which became a 100% owned subsidiary within the Group effective 1 July 2004. In previous years, the results from the Group’s 49.4% interest in WebCentral Pty Limited were equity accounted.

Commenting on the results WebCentral Group Chair, Lucy Hughes Turnbull, said:

“We have achieved a very healthy return for our shareholders in this financial year and have declared a fully-franked final dividend of 1.5¢ per share. This takes our total dividend for the year to 2.5¢ per share, a pleasing 150% increase over the previous financial year.”

WebCentral Group’s cash position is being managed at a comfortable $3.5m, compared with $8.3m for the previous corresponding period. Taking advantage of WebCentral Group’s strong cash position, $6m of debt was retired in the 2004-05 financial year reducing the Group’s debt level to $5m and reducing gearing from 13% at 31 December 2004 to 8%.

The Group’s WebCentral Pty Limited division, the largest web and application hosting company in Australia, increased its revenue by 17% to $43.1m for the 2004-05 financial year.

“Our WebCentral division has made a significant contribution to the Group’s result this year, achieving a 17% increase in revenue and strong growth in high value managed hosting services for corporate and government clients. WebCentral’s experience in managing quality infrastructure and service delivery mechanisms has also seen the company establish a stronghold in the flourishing Application Service Provider (ASP) industry as a key supplier to companies selling online software applications,” Mr Spicer said.

The Group’s digital recording business FTR Pty Ltd (FTR) increased its revenue by 39% to $15.3m in the 2004-05 financial year. In December 2004, FTR was awarded a new contract initially valued at approximately $7 million to supply recording systems to the US Social Security Administration (SSA).

“The SSA contract is a validation of FTR’s strategy to expand beyond the courtroom market into the public meeting room and hearing room areas. This new business was achieved through FTR leveraging its prestigious General Services Administration (GSA) accreditation, which is a significant purchasing pre-requisite for government organisations in the US,” Mr Spicer said.

“We have achieved a great result in the first financial year since the WebCentral acquisition, which creates a strong foundation for the company’s future. Both of our operating divisions have delivered strong results. WebCentral Pty Limited is expecting increased demand in 2005-06 for its high value managed hosting services, premium email and application hosting solutions and FTR will continue to capitalise on its success with the SSA contract to penetrate new markets such as Europe,” Mr Spicer said.