Continues to Enhance IT and Security Service Offerings Proactively — Capitalises on the Significant Regional Growth Opportunities
News Release – August 27, 2015
(Hong Kong, 27th August 2015) – Automated Systems Holdings Limited (“ASL” or “the Group”) (HKEx stock code: 771), a trustworthy and professional information technology (“IT”) partner in the region, announced its interim results for the six months ended 30th June 2015 (the “Review Period”). During the Review Period, total revenue of the Group amounted to HK$769.6 million, representing a 10.9% increase from the corresponding period last year, primarily driven by the increase in product sales.
Profit attributable to the Group’s equity holders was HK$8.1 million (2014 Interim: HK$34.1 million), mainly attributable to the one-off gain on the deemed disposals of the Group’s partial interests in an associate company, i-Sprint Innovations Pte Ltd, at HK$5.3 million for the Review Period, compared to HK$44.7 million of the corresponding period last year1.
Upon the implementation of various measures relating to human resources integration, effectiveness of operational efficiency and ongoing marketing promotion, the Group has achieved a positive momentum with an increase in revenue and a fall in overall operating costs, resulting in a net profit surge of the Group’s core IT business reaching 89.3% compared to the corresponding period last year. Overall gross profit margin was up 0.4% to 8.5%. Basic earnings per share for the Review Period were 2.60 HK cents (2014 Interim: 10.94 HK cents) while diluted earnings per share for the Review Period were 2.58 HK cents (2014 Interim: 10.94 HK cents).
The Group maintained a healthy financial position during the Review Period. The Group’s net cash stood at approximately HK$155.1 million with a working capital ratio of 1.73:1. Orders newly secured by the Group amounted to approximately HK$727.5 million for the Review Period. As at 30th June 2015, the order book balance was approximately HK$775.3 million and the Group’s outstanding borrowings amounted to HK$30.0 million.
Mr. Simon Leung, Chief Executive Officer of Automated Systems Holdings Limited said, “During the period under review, I am pleased to see the progressive results from our endeavours to refine and implement new strategies especially focusing on five key solutions and services pillars, namely, Infrastructure, Security, Data Intelligence, Mobile and Cloud. In January 2015, the Group blazed a trail in establishing an Automated Center of Excellence (“ACoE”), providing a unique platform for our partners and customers to see, touch and feel the integrated solutions we offer. ACoE has received positive feedbacks from customers and strong support from global IT partners in collaboratively developing integrated IT solutions.”
As compared with the corresponding period last year, product sales increased by 20.6% to HK$454.1 million while service revenue slightly decreased by 0.7% to HK$315.4 million, contributing 59.0% (2014 Interim: 54.2%) and 41.0% (2014 Interim: 45.8%) to total revenue respectively. In the Review Period, commercial and public sector sales contributed 41.7% and 58.3% to total revenue respectively, compared to 40.7 % and 59.3% for the corresponding period last year.
With more than 40 years of experience in systems integration, the Group responded to demand in the mobile market and successfully obtained projects for deploying large-scale Wi-Fi solutions for educational institutions and security enhancement. In addition, the Group was able to ride on the trend of big data and analytics by winning numerous projects across various industries. During the Review Period, the Group entered into high-value and long-term managed services contracts of a strong recurrent nature with organizations in the financial services, entertainment, engineering and maintenance sectors for the provision of help desk & deskside support services, onsite support services and data center operation support.
Against the backdrop of a complicated budget bill’s approval process of the Hong Kong Government in the period under review, the Group is pleased to record a steady growth in the government sector.
According to the International Data Corporation (IDC), it is anticipated that Asia-Pacific (excluding Japan) region will remain a most reliable engine for IT spending growth with multinational companies and Asian enterprises alike continuing to relentlessly look to Asia for future opportunities. In view of this, the Group will continue to invest proactively in enhancing service offerings to better position ASL in capitalising on the significant growth opportunities, such as big data, security and managed services, we see in the marketplace. In the beginning of the second half of 2015, the Group continued its success in garnering a multi-million dollar data analytics contract from an international airline. In July 2015, the Group was awarded a Standing Offer Agreement for Quality Professional Services 3 (SOA-QPS3) relating to Review of Government Information Technology Security Related Regulations, Policies and Guidelines for the Office of the Government Chief Information Officer.
According to Frost & Sullivan, an independent market researcher and consultant, the managed security services market in Asia Pacific (“APAC”) is predicted to record the fastest growth globally, with a compound annual growth rate of 16.2%, and increase to US$3.83 billion in 2018. Most customers in APAC prefer managed security services providers with local security operations centers due to the requirements of data sovereignty and other security compliance regulations imposed by governments.
In anticipation of a strong demand for managed security services, ASL has established an advanced Security Operation Center Plus (“SOC+”) in July 2015. The SOC+ is the eighth key area of the ACoE and is dedicated to provide security services to clients. Supported by more than 100 certified security professionals and more than 800 technical professionals with multi-vendor hands-on experience, SOC+ can provide onsite security incident response services across different platforms, which is unique in the Hong Kong marketplace. The establishment of SOC+ represents an ongoing commitment to improve ASL’s security services and solutions.
Apart from the managed security services market, the Group will continue to closely look for business opportunities in the other markets. Hong Kong Monetary Authority is now working with local banking sector for a brand new electronic payment services of which expecting rollout by the end of 2015. The Group’s competence was demonstrated by providing relevant applications to two prominent financial institutions in Hong Kong. The Group expects a similar demand to continue and is committed to actively capture the market.
Mr. Leung concluded, “Looking forward, we believe our proactive investment approach in core competences will increase the Group’s agility to cater for market demand. Coupled with our strong competence in providing IT solutions and services, the Group remains confident that our current strategies will foster its position as a trustworthy and professional IT partner and strengthen our foundation for long term sustainable growth in the future.”
1 Details of the deemed disposals in the Review Period and the corresponding period last year were disclosed in the Group’s announcements dated 28th January 2014, 4th February 2014, 12th February 2014 and 31st March 2015.
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