LONDON (Alliance News) - iEnergizer Ltd Tuesday posted lower pretax profit for the year to the end of March, taking a hit as its largest client winds down its contract with the company, but expressing confidence that it will be able to exceed previous levels of profitability and growth.
iEnergizer is a software and services company.
The company posted a pretax profit of USD21.7 million, down from USD29.7 million in the previous year, as revenue rose to USD155.4 million from USD150.3 million, although this was offset by higher operating costs.
The company said it had seen a reduction of USD8 million in revenues from the loss of a project with its largest client, whom it didn't name, during the financial year. Although other areas of the business were able to make up the loss, the project had very high margins, and the projects that iEnergizer replaced it with have lower margins.
Additionally, its back office services division was hit by an impairment charge of USD4 million related to two service contracts.
iEnergizer cautioned it will continue to be hit in the short-term by the wind down of the contract. As a result, it said it will have to make hard decisions and investments during calendar year 2014 to offset this.
The company said it was reorganising its business to focus on a go-to-market sales and services delivery model, and over the last six months it has changed its structure from a product-line-focused model to a customer-centric model.
It has established what it calls a major account pipeline sales program, which it said will help position it to win multi-year, multi-discipline, higher-value service contracts. However, it noted there would be some lag before its efforts have an effect, as the major account pipeline is estimated to have a selling cycle of 6 to 24 months.
"As we move through fiscal year 2015 and into 2016, we expect the business to convert this pipeline into project success, revenue and profit momentum as the new structure and initiatives take effect," the company said in a statement.
Shares in iEnergizer are untraded Tuesday. They last traded at 83.00 pence.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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