Mahesh Sharma | August 20, 2008
TOUGH conditions in its New Zealand and China operations haven't deterred accounting software developer MYOB from splashing out $7 million to acquire Australian web hosting company SmartyHost.
The buy is part of MYOB’s plan to expand its web hosting and internet marketing services, the company said."This follows our entry into the web hosting market through the acquisition of Ilisys earlier this year and will provide MYOB with a strong platform for growth in the web hosting sector," the company said.
The deal comes as MYOB reported revenues of $90.8 million for the first half of the year ending June 30, up six per cent on the corresponding period in 2007. Net profit after tax for continuing operations for the period was $9.8 million, up 27 per cent.
However, after factoring in losses from discounted operations, MYOB incurred a net loss after tax of $18.5 million. Earlier this year, MYOB sold off its struggling European businesses, with the move delivering gross cash proceeds of $78.7 million.
MYOB said its New Zealand business posted a disappointing result, with revenue down two per cent and earnings before interest, tax, depreciation and amortisation (EBITDA) down 17 per cent, due to deteriorating market conditions and increased competition in one segment.
Its Greater China business was patchy but South Asia reported a 35 per cent jump in revenues while Australia was also in positive territory with revenue growing 8 per cent and EBITDA up 15 per cent.
The company plans to start reviewing its Asian operations in the second half of the year.
MYOB chief executive Tim Reed, who replaced Craig Winkler in late June, said he expects to make several announcements around acquisitions in the second half of the year.