Revenue Rose 11.1% to HK$1,146.3 Million with Net Profit at HK$22.7 Million – – Stronger Development in IT Security Business – – Continues to Expand Solutions & Services Business in Asia Pacific Market
News Release – October 28, 2011
(Hong Kong, 28 October 2011) – Automated Systems Holdings Limited (“ASL” or “the Group”) (SEHK stock code: 771), a leading IT services provider in Hong Kong, announced its third quarterly results for the nine months ended 30 September 2011. During the period under review, the Group’s revenue amounted to HK$1,146.3 million, up by 11.1% compared to the corresponding period last year. For the three months ended 30 September 2011, the Group’s revenue was HK$385.1 million, increased by 27.6% compared to the same period last year.
In the review period, profit before income tax was HK$29.8 million (For the nine months ended 30 September 2010: HK$50.5 million). Profit attributable to the equity holders of the Group in the review period was HK$22.7 million (For the nine months ended 30 September 2010: HK$41.2 million). For the three months ended 30 September 2011, profit before income tax was HK$5.5 million (For the three months ended 30 September 2010: HK$10.9 million). Basic earnings per share in the review period were HK 7.30 cents (For the nine months ended 30 September 2010: HK 13.24 cents). During the period, the Group was being affected by the overall rise in costs. The rise was due to an increase in staff costs due to increased revenue from services business. The rise was also attributable to more resources on the investment in various projects, staff training and exploration of new businesses. During the period under review, selling and administrative expenses rose due to the relevant costs arising from the acquisition of the entire interest in i-Sprint Innovations Pte. Ltd. (i-Sprint) and newly added operating costs from i-Sprint.
The Group maintained a healthy balance sheet with cash standing at approximately HK$128.6 million as of 30 September 2011. No debt was recorded during the period under review and the working capital ratio was 1.61:1. During the three and nine months ended 30th September 2011, orders newly secured by the Group amounted to approximately HK$402.3 million and HK$1,287.2 million respectively, representing an increase of 21.8% and 20.7% respectively compared to the corresponding period in 2010. As of 30 September 2011, the order book balance was approximately HK$592.1 million, an increase of HK$7.6 million against the same period last year.
Mr. Simon Leung, Executive Director and Chief Operating Officer of Automated Systems Holdings Limited said, “We are glad to see continuous growth in revenue and promising development in different businesses. Following the 100% acquisition of i-Sprint in March 2011, the Group was pleased with the success made by i-Sprint in securing increasingly significant deals from state-level and major customers in Asia Pacific, by leveraging the latter’s capabilities and advantages gained over the past decade. The Group is well positioned as an IT security partner in Asia Pacific. We will continue to ride on our momentum on security solutions business. The Group has already unveiled a series of measures to manage the overall administrative cost effectiveness. Currently, the Group is stepping up outsourcing and strengthening human resources management. The Group also strived to boost the standardisation of services through the building of software management systems and software libraries. While reinforcing project management, the costs of software business may also be reduced.”
For the nine months ended 30 September 2011, product sales and service revenue were HK$679.8 million and HK$466.5 million, increased by 5.9% and 19.8% year-on-year respectively, and contributed 59.3% and 40.7% to the total revenue respectively compared to 62.2% and 37.8% from the corresponding period last year. For the three months ended 30 September 2011, product sales and service revenue were HK$219.3 million and HK$165.8 million, increased by 24.9% and 31.4% respectively as compared to the corresponding period in 2010.
In August 2011, i-Sprint obtained a pilot project contract from an advisory body of the Malaysian Government. Upon completion of the project, the proposed solution will become a pre-approved IT security solution which would be available to other government departments. In September 2011, i-Sprint also obtained a security project from a Singapore governmental body regarding the supply of its AccessMatrix products, safeguarding e-government applications which support millions of users.
To further tap into the Greater China market, i-Sprint set up an R&D centre at the Group’s Outsourcing Delivery Excellence Centre (ODEC) in Zhuhai in August 2011. The centre is well equipped with a team of senior and experienced engineers to ensure projects quality, focusing on product development and localisation of the mainland market. In the mainland China market, i-Sprint has carved out its own niche. In September 2011, i-Sprint received an order from a well-known tobacco company to provide its market-proven software which will benefit the customer in managing the identity and password for accessing enterprise information. In the same month, i-Sprint obtained a security project to supply its software to a commercial bank in order to strengthen the bank’s internal control of accessing internal applications.
In Hong Kong, along with the forthcoming completion of a number of projects undertaken earlier this year, the Group has also received repeated orders from a leading bank in Hong Kong in relation to the enhancement of the bank’s applications by integrating with i-Sprint’s products as the bank’s core security components.
The Group sustained steady growth in IT solutions and services business. During the review period, the Group successfully obtained a number of solution orders. Of note were a business intelligence solution relating to the provision of consolidated financial data for an internationally-renowned manufacturer; as well as an enterprise content management solution for a government agency with an aim to enhance an e-form module of the customer’s existing maintenance works management system.
With regard to the managed services business, the Group has completed the set up of thousands of units of desktop computers and laptops for the customer’s offices in Hong Kong and mainland China after securing an order from an internationally-renowned airline in March 2011. Apart from receiving recognition from the airline, the Group has also received additional similar orders from the customer to deliver over 1,000 units of desktop computers to its offices in Hong Kong and mainland China. Other newly-added key managed services projects include the provision of systems integration and management services to a government department for the e-government platform running in its data centres and the provision of managed network support services for a Hong Kong-listed multinational apparel company for a number of years to come.
To foster the business development in security services, the Group is actively gearing up for the establishment of a security operation centre which is anticipated to commence operation by the end of 2011. This move is to further enhance our service quality. During the period, the Group won security services orders from three government departments to provide IT security monitoring services for the said departments. The three government departments are expected to benefit from the services of the security operation centre. The Group was also awarded a standing offer agreement by a government department in Hong Kong, whereby the Group will provide the departmental IT plan for the next five financial years from 2012/13 to 2016/17 and offer IT resource planning and work programme management for the department. Through participation in the formulation of the IT plans of the government department, the Group can obtain a better understanding of the department’s IT demands in the short to medium term. The Group expects that these types of projects will heighten its competitive edges in striving for business deals and customer confidence.
The performance of the IT infrastructure services business grew steadily. Specifically, the Group garnered a multi-million dollar computer system upgrade project for the launch of the new public services for the residents of Hong Kong and Macau. The public services for inbound and outbound travellers will be enhanced through the improvement of operational efficiency.
Looking ahead, the Group foresees that a relatively challenging business landscape in future amid the economic uncertainties around the world. With the Group’s solid foundation and strengthening of cost-effective measures, the Group believes that it is well-positioned to meet the challenges ahead and seize the many business opportunities in the Asia Pacific region, including the opportunities arising from cloud computing, data security, business intelligence and records management. It is also expected that Hong Kong Government’s initiative to promote Hong Kong as the preferred location of a data centre in Asia Pacific will facilitate the Group to further expand its data centre operations.
The Group was pleased to announce in October 2011 that one of its security experts had been honoured as the winner of the first “BCI Asia Business Continuity Awards – Business Continuity Specialist of the Year (2011)” award. The award aims to recognize the expert’s excellent performance in business continuity. As a matter of fact, the Group has retained a large pool of professional talent with extensive expertise in different IT areas. This award illustrates the Group’s strengths in offering a variety of IT solutions.
Mr. Leung concluded, “The Group will continue to dedicate focused efforts on extending its reach into various kinds of solutions. In particular, by leveraging i-Sprint’s R&D centre and its achievements in mainland China, we believe that the Group’s security business in mainland China will meet with positive prospects. Besides, the Group will continue to strengthen its services level and quality. Through the formation of stronger partnership alliances, the development of market-recognised products with intellectual property rights, and the establishment of a closer collaboration with the Group’s ultimate holding company, Beijing Teamsun Technology Co., Ltd., the Group will be well-poised to bolster its capabilities in offering regional services and deliver value-added services for its customers.”
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