Revenue Increased 8.8% to HK$994.5 Million – – Net Profit from Continuing Operations Rose 74.2% to HK$34.5 Million – – Strives for Gaining Solution Business – – Continues to Increase Presence in Greater China
News Release – March 11, 2011
(Hong Kong, 11 March 2011) – Automated Systems Holdings Limited (“ASL” or “the Group”) (SEHK stock code: 771), a leading IT services provider in Hong Kong, announced its annual audited results for the nine months ended 31 December 2010(1) . During the period under review, the Group’s revenue from continuing operations amounted to HK$994.5 million, up by HK$80.5 million or 8.8% compared to the corresponding period last year. Net profit from continuing operations for the nine months ended 31 December 2010 was HK$34.5 million, increasing by 74.2% compared to the same period last year. Basic earnings per share from continuing operations for the period under review were HK 11.09 cents (For the nine months ended 31 December 2009: HK 6.46 cents).
For the three months ended 31 December 2010, the Group’s revenue from continuing operations was HK$361.2 million, higher by 21.9% compared to the same period last year. Net profit from continuing operations for the three months ended 31 December 2010 was HK$16.7 million, up by 65.8% compared to the same period in 2009.
The Board of Directors recommended the payment of a final dividend of HK 4 cents per share for the nine months ended 31 December 2010. The Group continued to maintain a healthy balance sheet with net cash of approximately HK$195.6 million as at 31 December 2010. No debt was recorded during the period under review and the working capital ratio was 1.81:1. The Group’s order book balance was approximately HK$616.3 million as at 31 December 2010.
Mr. Simon Leung, Executive Director and Chief Operating Officer of Automated Systems Holdings Limited said, “The Group’s business progressed steadily during the period under review, and we are pleased to achieve solid performance with strong profit growth, in line with the trend of rising IT spending. With the economic growth and added demand, we continued to score significant wins from the IT infrastructure, solutions and services businesses. Leveraging our solid foundation, we have successfully expanded our cross-territories business and have demonstrated our capabilities as a one-stop service provider.”
Product sales and service revenue for the nine months ended 31 December 2010 were HK$573.9 million and HK$420.6 million, increasing by 5.5% and 13.6% respectively against the corresponding period in 2009, and contributing 57.7% and 42.3% to the total revenue respectively compared to 59.5% and 40.5% of the total revenue during the same period from the previous year. Commercial and public sector sales from the continuing operations for the nine months ended 31 December 2010 accounted for 45.9% and 54.1% of the total revenue respectively compared to 47.1% and 52.9% in the same period last year. Commercial and public sector sales for the three months ended 31 December 2010 contributed 39.6% and 60.4% to revenue respectively compared to 47.9% and 52.1% from the corresponding period last year.
Satisfactory performance was recorded in the infrastructure business. The Group has secured a contract worth more than HK$6 million to provide a renowned public transport operator in Hong Kong with email systems upgrade and migration services in October 2010. This project is to offer greater storage capacity and improved information sharing to the customer so as to assist them to address the issues of rapid growth and aging hardware.
During the period under review, the Group saw a steady growth in demand for solutions business, in particular business intelligence and security solutions. The growing demand for business intelligence solutions is fuelled by the customers’ increased desire to improve their decision making processes. In commercial sector on one hand, particularly in the retail level, analytical solutions to identify buying behaviors and sales activities were in upward demand due to the need to reduce operation cost and maintain business growth. On the other hand, the rising demands for security solutions were driven by sophisticated security threats, greater usage of remote access, more regulatory compliance requirements and greater acceptance of new delivery models for services, such as cloud computing and software-as-a-services. With an established professional solutions team and proven service delivery methods, the Group has secured a number of significant and complex solutions projects. In December 2010, the Group won a multi-million dollar business intelligence project from a wholly-owned subsidiary of one of the world’s largest investment and insurance companies. The project includes the consolidation of raw data and customer data from all their business units into a clean and organized view of the business to be used for reporting and analysis. Also, a security contract was awarded by a government authority in the same month to consolidate and centralise all IT log data for an optimised and more secure network.
The Group continued to achieve a stable and recurrent stream of income from a number of significant long-term managed and maintenance services contracts. In May 2010, the Group was awarded with a support services contract valued in excess of HK$1 million, which was the subsequent phase of a workflow management system project secured from a government authority in December 2009. The contract value of the entire project will be more than HK$40 million. In addition, the Group won numerous projects such as the provision of networking, database and storage products from this government authority during the period under review.
The Group’s presence in the Greater China region has further increased. By following the footsteps of its Hong Kong-based customers and international corporations into mainland China, ASL’s cross-territories business showed substantial progress. The Group’s customer portfolio grew while services offerings were in greater complexity, volume, geographical coverage and scope. A number of sizable cross-territories projects were also successfully secured, including two multi-million dollar storage projects that were deployed in Hong Kong and Shenzhen for one of the region’s largest shipping companies; and projects that involved cross-territories deployment covering a number of first and second-tier cities in mainland China were successfully carried out.
Leveraging collaborative opportunities with Beijing Teamsun Technology Co., Ltd. (“Teamsun”)., the Group and Teamsun jointly secured a tender valued at more than HK$7 million from a subsidiary of a renowned public transport operator in Hong Kong to set up a new data center in Shenzhen in December 2010. The project is to facilitate the customer’s operation of a transportation system which will be in service soon, and ASL will be responsible for the solutions design, hardware and software installation, and maintenance services.
Looking ahead, the Group will continue to follow its cross-territories business strategy while leveraging Teamsun for greater synergies in the Greater China market. In January 2011, the Group and Teamsun jointly received two multi-million dollar IT infrastructure upgrade orders from one of the largest IT distribution companies in Taiwan after the first one awarded in December 2010. Servers, storage, networking products and a 3-year maintenance services contract will be provided at many logistics centers, including Taiwan, Shanghai and Australia, to support the customer’s worldwide operations and business expansion. This contract signifies the continued trust placed on ASL’s service expertise in the Asia Pacific region, and the sustained success of the Group’s presence in Taiwan over the past decade.
Mr. Leung said, “We expect the momentum for growth in 2010 will continue for the remainder of 2011. With our well-established vendor network and technical expertise, we will continue to offer a wide range of products and services and to promote the solutions business with a focus on business intelligence and security arenas. The exclusive distributorship of “YESKEY”, a security related IT product from Teamsun and its subsidiaries (“Teamsun Group”) in October 2010, would place the Group in a prime position to strengthen its leading role in the growing regional IT-security market. In the year ahead, the Group plans to work closely with Teamsun in the Greater China market, aiming to bring diverse and advanced solutions to customers.”
Apart from providing customised solutions using IT products available in the market, the Group has dedicated forces to study ways of monetizing some of its market-proven solutions, and will replicate them to other industries. The Group’s continued investment in intellectual property development will enable it to achieve excellent IT support services, faster time-to-market, and provide greater value to its customers, bringing to the Group a higher degree of market differentiation.
Mr. Leung concluded, “Moving forward, we would continue to help multinationals and Hong Kong-based enterprises to successfully enter into mainland China by cooperating with Teamsun. We would also closely monitor for opportunities to act as a springboard to help mainland China’s enterprises in their overseas expansion. We will continue to seek regional opportunities to achieve further business growth through mergers and acquisition. Through implementation of a well conceived strategy, we believe our goal of becoming one of the leading IT services providers in the Asia Pacific region will soon be realised.”
1 As announced earlier in 2010, the Group changed its financial year end date from 31 March to 31 December to align its financial year end date with its ultimate holding company – Beijing Teamsun Technology Co., Ltd.
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