Revenue Increased 10.4% to HK$1,537.3 Million, Net Profit Amounted to HK$44.8 Million – – i-Sprint Successfully Enters Greater China Market – – Strives to Expand IT Solutions & Services Business
News Release – March 16, 2012
(Hong Kong, 16 March 2012) – Automated Systems Holdings Limited(“ASL” or “the Group”) (SEHK stock code: 771), a leading IT services provider in Hong Kong, announced its annual results for the year ended 31 December 2011. During the period under review, the Group’s revenue amounted to HK$1,537.3 million, up by 10.4% compared to the same period in 2010. For the three months ended 31 December 2011, the Group’s revenue rose 8.3% to HK$391.1 million year-on-year. The Board of Directors recommended the payment of a final dividend of HK 5.5 cents per share for the year ended 31 December 2011.
Profit before income tax was HK$45.1 million in the review period (2010: HK$72.9 million). Profit for the year attributable to the equity holders of the Group was HK$44.8 million (2010: HK$58.5 million). For the three months ended 31 December 2011, profit before income tax amounted to HK$15.3 million. Basic earnings per share for 2011 were HK14.39 cents (2010: HK18.79 cents). The Group’s results were impacted by the overall rise in costs. The rise was attributable to the wage hike in the overall labour market, increase in staff costs for enhancing service level, and more resources on the investment in various projects. During the year under review, the one-off relevant expenses for acquiring i-Sprint Innovation Pte. Ltd. (“i-Sprint”) and additional operating costs from i-Sprint were also the primary factors. During the period under review, the Group assessed the tax allowance provided in previous years, and reversed part of the tax allowance to partially reduce the impact from an increase in operating cost.
The Group maintained a healthy balance sheet and no debt was recorded during the period under review. The Group’s cash stood at approximately HK$108.4 million as at 31 December 2011 with a working capital ratio of 1.73:1. During the three and twelve months ended 31 December 2011, orders newly secured by the Group amounted to approximately HK$507.5 million and HK$1,794.7 million respectively, up by 26.3 % and 22.2 % respectively year-on-year. The Group’s order book balance was approximately HK$713.7 million as at 31 December 2011, up by HK$97.5 million against the same period in 2010.
Mr. Henry Hui, Chief Executive Officer of ASL said, “The Group’s revenue kept growing last year with all business segments progressed steadily. The Group continued to win support from various commercial and public sectors customers. The acquisition of i-Sprint last year yielded encouraging results as the deal not only helps the Group to secure an increasing number of significant deals, but also widened its customer portfolios and enhanced market penetration in different markets. The Group will continue to carry out a series of cost control measures to lower its software business overheads by outsourcing and strengthening the relevant management in human resources and software projects.”
For the year ended 31 December 2011, product sales and service revenue rose 6.6% and 16.3% to HK$899.5 million and HK$637.8 million respectively, contributing 58.5 % and 41.5 % of total revenue, comparing to 60.6 % and 39.4 % respectively from the corresponding period in 2010. For the three months ended 31 December 2011, product sales and service revenue were HK$219.8 million and HK$171.3 million, which increased by 8.7 % and 7.7 % respectively as compared with the same period in 2010.
Commercial and public sector sales for the year ended 31 December 2011 contributed 39.9% and 60.1% to revenue respectively, compared to 44.9 % and 55.1% in the corresponding period of 2010. For the three months ended 31 December 2011, commercial and public sector sales contributed 42.4 % and 57.6 % to revenue respectively, compared to 39.6 % and 60.4 % for the same period in 2010.
The Group achieved satisfactory development in the Greater China market with the acquisition of i-Sprint in March last year. Its key achievements included successful penetration of a full suite of i-Sprint products into Hong Kong market in the first half of 2011, followed by an extension to mainland China and resulted in a number of significant projects. i-Sprint also established an R&D Centre at the Group’s Outsourcing Delivery Excellence Centre (ODEC) in Zhuhai, focusing on product development and localisation for the mainland China market. At the same time, i-Sprint expanded its business to Taiwan not only by seizing a new order from TransGlobe Life Insurance Inc. towards the end of last year, but also winning a contract from one of the largest financial institutions in Asia to provide security solutions for accessing its banking system.
In view of the regulatory compliance requirements for data management in Internet and Mobile banking in the market, i-Sprint’s extensive experience and expertise to implement authentication solution in many renowned financial institutions in Asia Pacific, as well as its capable platform to support multi-brand hardware token, the Group launched a security project in January 2012 for the largest financial holding company in Taiwan to provide a two-factor authentication and transaction signing token management platform. The project value is one of the highest amongst the Group’s IT security business projects in Taiwan.
During the year, the Group’s IT Solution Business maintained good results by securing various deals for the provision of popular solutions in the industry, including business intelligence and enterprise content management. The Group has also made satisfactory progress in the security solutions business as it succeeded in extending the market-proven security assessment services to Macau by providing the Macau Education and Youth Affairs Bureau such services to minimise the potential security risk as concerns its e-public services.
Leveraging the Group’s capabilities to support Cloud Computing, the Group was further awarded a multi-million dollar Cloud Computing project in December 2011 after winning a project relating to the provision of a cloud platform with Geographical Information System (GIS) services to several government departments in June 2011. The Group was responsible for design, supply, delivery, installation, implementation, commissioning, system support and maintenance and other related services for a government department’s information system which can assist 10 government departments effectively in managing the public property for better public safety. Besides, the Group won a multi-million dollar tender from a government department to provide an integrated system, which can assist the application process of financial subsidy to improve operational efficiency. This project is expected to provide recurrent income to the Group in the future.
In service business, the Group captured the opportunities from long-standing and major customers covering different IT areas, different industry sectors and different regions. In particular, the Group’s managed services made steady progress. Notable results include the continuous supply of complex and large-scale desk side and server operations support to an international airline, together with the supply of several thousand units of desktop computers for all of its offices in both Hong Kong and mainland China; the provision of systems integration and managed services for the operation of data centres of a government department; and the provision of managed network support services for a Hong Kong-listed multinational apparel company for a number of years to come. The Group’s managed services also extended to Thailand, including provision of a multi-million dollar infrastructure managed services to a renowned bank in Thailand, a bank with which our business relationship has already lasted for over a decade.
ASL is always committed to enhancing our service level. We have been awarded with the ISO 20000 IT Service Management (ITSM) Certification from the Hong Kong Quality Assurance Agency (HKQAA) in December 2011 and became one of the few IT companies to earn this accreditation. The recognition will enable the Group’s continuous development in managed services business.
Significant achievements were made in IT infrastructure business during the year. Major contracts won by the Group recently included the storage system upgrade for a world-renowned logistics company, as well as the firewall upgrade and security equipment migration services for the aforesaid airlines. The Group also secured an order for the provision of networking infrastructure and systems integration services for Escola Sao Paulo.
Looking ahead, the Group will continue to focus on the expansion of the recurrent revenue-based business, such as managed services, and strive for more sizable projects from customers of the public and private sectors. In the beginning of this year, the Group obtained a multi-million dollar contract from a financial institution for the supply, implementation and maintenance of the operations support systems at its newly-established data centre in Hong Kong, which was a fruition of its earlier efforts towards actively looking into opportunities deriving from data centres. The Group will continue to promote various kinds of solutions. By leveraging the advantages and leading position of i-Sprint in the market, the Group will keep facilitating the growth in IT security solutions business. The Group will also actively seize business opportunities arising from the future market transition into the “Cloud Era” amid the Government’s strategy of establishing a government cloud environment progressively over the next few years in order to support a new series of e-services applications to enhance the quality of public services. The Group is well-prepared to provide cloud infrastructure, data centre service, systems integration and implementation, and consultancy service to customers across the Asia Pacific region.
Mr. Hui concluded, “In the growing regional IT-security market, we are eager to become a leader in bringing diverse security solutions to regional customers. Besides, we will continue to work with Teamsun to build greater synergies for promoting the stated cross-territories business. Through the acquisition of i-Sprint, we are well-positioned to compete more effectively in Asia Pacific, bringing even higher value to our shareholders.”Mr. Hui concluded, “The Group will continue to implement cost-effective measures, strengthen our services level and quality, establish stronger partnership alliances, and create greater synergies with our ultimate holding company Beijing Teamsun Technology Co., Ltd. We strongly believe that, by leveraging our solid foundation and excellent performance, we can offer innovative solutions and services to customers for sustainable growth of our business.”
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