UXC on track for $500m IT revenue in FY11

IT services and consulting company UXC limited (ASX:UXC) said it is on target for $500m in revenue from its IT group in FY11, after earning $237m in the first half

UXC Limited (ASX:UXC) is on track to reaching $500 million in revenue from its IT business in FY11.

In a presentation to investors, UXC said its IT group recorded 1H revenue of $237 million.

The number of clients spending over $1 million per year has also reached around 100, UXC said.

Around 34 per cent of UXC's customers are from government, 16 per cent from the consumer goods and services sector and 13 per cent from capital goods and commercial services.

The IT and communications industry makes up nine per cent of the client base, the same percentage as energy and utilities. The remaining customers are in the financial, resources, education and transportation sectors.

UXC quoted a Gartner report stating that the company had the third largest share of the APAC IT consulting market in 2009, beaten only by IBM - the market leader - and Accenture. UXC's own share was an estimated 6.5 per cent that year, Gartner said.

But in IT and network management UXC was in eighth place with just a 1.7 per cent share, and in software support it was eleventh with a 1.8 per cent share.

The company is conducting a simplification program, involving consolidating three IT infrastructure businesses into one under new brand UXC Connect, as well as combining its consulting and advisory services under the UXC Consulting brand.

UXC acknowledged that results from its IT businesses had been diluted in the past, but said the simplification program should improve the quality of earnings from FY12 on.

The company will concentrate on improving earnings rather than growth in the next financial year, but will also pursue investments in new technologies or markets.

UXC shares grew 3.48 per cent in Wednesday's trading to $0.595.

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