Mahesh Sharma | August 20, 2008
TECHNOLOGY services company Melbourne IT will plough millions of dollars back into integrating and upgrading its IT systems, as it looks to significantly ramp up growth.
This comes as the company generated revenues of $86.7 million in the half year to June30, a 12 per cent increase on the previous year.Net profit after tax was $7.8 million, up 20 per cent on the corresponding period in 2007.
Melbourne IT would spend more than $5 million over the next 12-18 months to improve its ability to service clients and deliver services globally, managing director Theo Hnarakis said.
This would go towards integrating hosting business Webcentral, which it acquired for $76 million in 2006, and rolling out a new customer relationship management and accounting platform across the business.
It will also spend another $3.8 million on integration and transition costs for its digital brand services arm, DBMS, which it acquired earlier this year.
Mr Hnarakis expects the benefits of this investment to start being realised in 2009.
"What we need to do is stabilise this business and we need to see its scale," he said.
"At the moment we're on a run rate of doing $25 million to $26 million for the year in terms of revenue, but for this to become a $50 million to $100 million business, we need to invest."
The company declared an interim dividend of 7c a share, compared with 6c in the prior corresponding period.
Melbourne IT shares rose 3c to $3.10 yesterday.