Perth based IT solutions provider ASG is looking to bounce back from a poor 2013, after restructuring and moving to a more service oriented offering.
Chairman Ron Baxter told shareholders at the company's AGM that the company is predicting first half 2014 EBITDA of $9.5 to $10 million, including a $1.2 million writeback for bad debts that are no longer considered risky. The company has also picked up some key new contracts which should start earning in the new financial year.
"Strong marketing and sales efforts have led to over $100 million worth of new contracts being negotiated and signed in the first quarter of FY14, a record for the company," he said.
2013 has been tough for the company which saw it shift away from traditional box selling ('old world computing') to more service based ('new world') offerings, which saw it post a loss of $26.7m, which it blames on a $17.7m impairment charge due to restructuring and other costs.
"The traditional markets have continued to experience significant slowdown. The opportunities we were pursuing 12 months ago were unsuccessful," he said.
"The decision was made to de-emphasise this type of business in our portfolio and to realign our structure, balance sheet and capabilities to further emphasise the New World, which provides much greater opportunities for market development and organic growth."
The company has also squared off a further $7 million in debt, which Baxter says will allow the company to continue its organic growth.
It also rebuffed an offer from Lockheed Martin in March valued at 0.68c per share, calling the offer 'significantly undervalued.'
"The board did treat them seriously and discussions indicated that Lockheed were interested in our strategic positioning and our New World capability, which was in advanced development at the time."
At the time of print, ASG's share price was just 0.37c. At the time of Lockheed's interest, it was hovering around 46c p/s.
"Although we are the clear local leader in this type of service provision, we acknowledge that our shareholders and the capital markets generally are waiting for us to prove the value of our positioning and our business model with quality financial results," Baxter said.
"Next February, and later, with our full year results, in August, we expect to be releasing superior results based upon solid organic growth, good margins, firm cost control and good access to the expanding New World markets."
