UXC forges ahead with demerger plans
- 25 February, 2011 12:45
UXC (ASX:UXC) will forge ahead with plans to demerge its IT and field solutions businesses into two listed entities, despite being unable to find a buyer for the latter group.
While the field solutions group (FSG) has continued to increase revenues and overall earnings before interest, tax, depreciation and amortisation (EBITDA) on UXC's balance sheet, the company reported in it's half-yearly results this week that the business brought in three times less than the IT group for the year to 31 December 2010. Managing director, Cris Nicolli, said the discontinuation or sales of non-core aspects of the group had helped boosts those financials.
However, late last year the company indicated it was yet to find a willing buyer for the field solutions business, which it was selling in an effort to unlock greater shareholder value. Reported negotiations with an undisclosed party expired in July last year.
In a statement to the ASX, the IT services and consulting company indicated its business and professional solutions group (IT group) posted revenues of $237 million, an increase of eight per cent for the year to 31 December 2010.
IT group EBITDA reduced by five per cent to $18 million for the 12 month period, a figure the company attributed to organic growth.
The field solutions group (FSG) recorded an $85 million revenue from continuing operations, a jump of 12 per cent over the year, and earnings of $5.78 million.
Nicolli said both the metering and utility asset management business had experienced growth as both had achieved significant contract renewals, contract extensions, and new wins with customers including SP Austnet, Western Power, Energex and Ergon Energy.
Overall, UXC’s revenue was recorded at $322.29 million for the six months ending 31 December 2010, up from $296.6 million in 2009.
Net profits after tax decreased from $15.32 million to just $3.82 million for the half-year period.
According to Nicolli, its continued plans to demerge the IT and utility services businesses would simplify the business and help UXC refocus on core operations in the IT sector.
As reported by Computerworld Australia, the company’s business arm UXC Connect recently penned an initial three-year outsourcing deal with manufacturing company DuluxGroup Australia. The deal will provide the construction of the new IT environment and provide infrastructure management and support services for Dulux’s approximate 2000 users in the Asia Pacific region.
The deal follows two Victorian public sector contract wins for the company, securing managed IT infrastructure contracts for up to five years with the Victoria WorkCover Authority and the Transport Accident Commission.
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