'Distracting and costly' hostile takeover attempt hampers Cirrus results

'Distracting and costly' hostile takeover attempt hampers Cirrus results

Company experienced strong second half following restructure.

Credit: Cirrus Networks

Publicly listed Cirrus Networks has revealed its consolidated revenue for FY22 will dip by two per cent to $104 million, unaudited results reveal. 

Despite this, the company experienced a record second half-year revenue of $59.6 million, up 13.5 per cent on the previous year. 

The revenue was generated despite a backlog in customer orders contracted, but not yet delivered or recognised due to supply chain constraints, carrying $12.1 million into FY23. 

Normalised earnings before tax (EBITDA) was up two per cent to $2.16 million while net profit before tax fell $587,300 into the red. Redundancy and business restructure costs sat at $513,775. 

The company said the first quarter results were driven down by significant internal and external headwinds including “a distracting and costly failed low-ball hostile takeover attempt” by Webcentral in August last year.

Cirrus managing director Chris McLaughlin said the speed and success of the business restructure decisions in October met its expectations and has driven a strong second half result, with improved revenue and margins on a significantly lower annualised overhead cost run-rate.

“Through the restructure the business has been re-energised and I want to recognise and thank the Cirrus staff across all our locations who have embraced the changes and continue to be recognised for their technical expertise, innovative approach and uninterrupted focus to deliver great client outcomes,” McLaughlin said.

“The success in the second half and significant ongoing momentum, coupled with a solid debt free balance sheet and $9.6 million of cash, puts the business in the strongest position it has ever been going into a new financial year.”

Cirrus highlighted that record revenues continue to be earned from a high quality and economically robust client base with federal, state and local government representing 66 per cent of its FY22 revenues, followed by ‘Tier-1 major Australian resource companies’ at 16 per cent. 

Combined services revenues -- professional and managed -- was up 17 per cent to $30.9 million on FY21, driven by an increase in managed services annuity revenue. 

Cirrus hinted the transition and operation of the Geoscience managed service in FY22 was a strong contributor to this increase and it was confident in its managed service trajectory with its significant Icon Water managed service contract, which is due to start during FY23, supported with a strong pipeline of qualified opportunities and a number of tenders lodged awaiting final outcomes. 

Professional services revenue was up 27 per cent delivering $9 million in the second half of FY22, which Cirrus said was “an excellent result after a lower H1 affected by ongoing project delays caused by supply chain negatively impacting product deliveries for implementation projects along with continued tightening of the labour market due in large part to state and international border restrictions.”

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