Melbourne IT CEO wants company to become a sales and marketing business

FY2013 SMB Solutions division revenue was down 7 per cent on 2012

Melbourne IT CEO Martin Mercer.

Melbourne IT CEO Martin Mercer.

Melbourne IT (ASX:MLB) CEO Martin Mercer said today at the company’s AGM in Melbourne that he wants to turn the organisation from a “product-led, technology oriented” business into a sales and marketing business.

As part of this change, he wants to return the small to medium business (SMB) Solutions division to growth over the next two years.

For the full year 2013, the company’s SMB Solutions division recorded revenues of $76.3 million, a 7 per cent decline on 2012 when Melbourne IT recorded revenue of $82.2 million.

“In the next two years, the SMB business will return to growth, we drive revenue gains from a combination of increased share in our core business and a growing contribution from new products and services,” he said in in a statement released to the ASX.

Turning to the Enterprise Services division, Mercer wants to change this from a dedicated hosting provider to an entity where “managed services are the lead driver for growth".

During 2013, the company’s Enterprise Services division recorded revenues of $24.5 million, a 6 per cent decline on 2012 when Melbourne IT posted revenue of $26.1 million.

In 2013, the company reported a total revenue of $103.4 million, down 5 per cent on 2012’s revenue of $108.5 million.

EBITDA was $5.8 million, down 43 per cent on 2012’s EBITDA of $10.2 million.

Mercer added that Melbourne IT had commenced the integration of Netregistry Group, which it acquired for $50.4 million in February 2014.

At the time, Melbourne IT’s acting CEO Peter Findlay confirmed that the Netregistry Group’s management team and staff would be retained. Founder Larry Bloch joined the Melbourne IT board as a non-executive director.

Mercer said Bloch’s experience and Netregistry’s “proven management team” would help it grow in a competitive marketplace.

Turning to other financial results, he said the 2013 sales of the Digital Brand Services and ForTheRecord divisions for $158.8 million delivered “real shareholder value". The sale of these two divisions resulted in a net gain on sales of $66.4 million in the first half of the six months ending 30 June 2013, contributing to a net profit after tax (NPAT) of $70.3 million.

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Read more: Martin Mercer to leave Optus for Melbourne IT CEO role

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