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Sales and profitability up at Citect

Edited by the Engineeringtalk editorial team Mar 20, 2006

Citect Corporation has reported results for the second half-year to the 31st of December 2005 and the full 2005 fiscal-year.

Citect Corporation has reported results for the second half-year to the 31st of December 2005 and the full 2005 fiscal-year.

The full year 2005 profit before tax, before costs related to the acquisition offer by Schneider Electric of $1.5 million and one-off restructuring expenses of $1.2 million, was $6 million up 33% on 2004.

Profit before tax after one-off restructuring expenses was $4.8 million, which is in line with the upgraded guidance of $5.0 million provided to the market on 13th October 2005.

All products and services posted record revenue results in 2005.

Specifically Scada software revenue was up 6% and Ampla software revenue was up 48% versus 2004.

Support and training revenue was up 33% and professional services revenue was up 8% versus the same period last year.

Geographically revenue grew 13% in Oceania, 88% in North America, 21% in South East Asia and 2% in Europe due to the successful release of Ampla and improvement in the support and training revenue model.

However, this was offset by Africa, which was down 33% due to general trading conditions, and China which was down 4% due to management issues and uncertainty in Q4 over the future ownership of the company.

The Citect board has approved a budget for the 2006 year, which continues to reflect the trend of improvements in sales and profitability that Citect has experienced in 2005 with most substantial improvements weighted to the second half of the year.

In the second half of 2005 the company posted a record profit before tax of $4.5 million before one-off restructuring expenses in Australia and Europe of $0.6 million and transaction costs related to the acquisition offer from Schneider Electric Australia Holdings of $1.5 million.

This represents a profit before tax growth versus the same period in 2004 of 76% in spite of the uncertainty surrounding the ownership of the company.

The result was in large part driven by record revenues of $35.4 million which represents an increase of 9% versus the second half of 2004.

All products and services posted record revenue results: Scada (+6%), Ampla (+70%), support and training (+20%), and professional services (+4%).

The North America, Latin America, Oceania, and South East Asia regions all posted record results while Africa (-38%) and China (-35%) continued to trade significantly below their results in the second half of 2004.

A number of initiatives have been executed to address the sales performance issues in China and Africa; which include the recruitment of new sales executives in Africa and a complete review of the China business by a recently recruited executive from Hewlett Packard.

A comprehensive restructure of the business was implemented in the second half of 2005 to improve sales execution and streamline the cost base.

"The strong momentum of the second half of 2005, in spite of ownership uncertainty, is expected to carry through the 2006 fiscal year".

"We continue to believe that the next generation of business improvement systems will come from the implementation of real-time business intelligence software and the implementation of continuous improvement solutions and systems".

"Citect is well positioned with its current strong Scada offering, emerging next generation MES offering (Ampla), global distribution footprint, innovative new patented products, and it's blue chip client base to exploit these emerging trends", noted Richard Webb, Chief Executive Officer "While the majority of the restructure activities are complete we will continue to review processes and operations to identify and implement ongoing improvements".

"Part of the process will be the global rollout of an ERP system in the first half of 2006 to streamline and automate back office activities".

"A key focus moving into 2006 will be the continued growth of our existing annuity revenue stream and its expansion with the introduction of new product offerings", said Ken McDonnell Chief Financial Officer.

The Directors of Citect have recommended that shareholders and option holders approve schemes of arrangement whereby Schneider acquires all the shares of Citect for $2.15 plus a $0.05 dividend and all options are cancelled for consideration.

Shareholders and option holders should refer to the Directors Statement to the ASX on the 27th February regarding their recommendations and the reasons for them.