UXC Forecasts Strong Performance for 2008
AGM announcements include three new contract wins and revised revenue forecast to mid $500 million mark - 22 November 2007
Leading Australian technology services company UXC (ASX:UXC) today narrowed guidance on revenue expectations for FY08 from in excess of $500 million to the mid $500 million mark. The announcement at the company’s AGM follows the company’s record FY07 financial performance and an unbroken run of growth in revenue, earnings and EPS while operating in its current format since 2001.
Executive Chairman Geoff Lord also commented on yesterday’s announcement that UXC’s Field Solutions Group (FSG) had won three new contracts valued at $19.5 million.
“The new contracts, coupled with continued strong performance across the business means we’re carrying a strong earnings momentum into the first half of FY08,” said Lord.
UXC has achieved strong organic growth over the past year in its two major groups: Business Solutions Group (BSG) and Field Solutions Group (FSG). BSG provides market leading Information and Communication Technology solutions and services to government and major corporates. FSG provides asset and data management to utilities as well as water conservation, energy saving and other environmental solutions.
At the AGM today, Lord outlined two ‘sweet spots’ that had contributed to the company’s success over the past year and that are expected to continue to drive UXC’s organic growth in FY08.
Firstly, the continued trend towards selective sourcing and the strong IT spending environment had fuelled UXC’s organic growth, particularly within the BSG. Secondly, UXC’s FSG had benefited from state government infrastructure spend programs in electricity, water, roads and transport.
“We expect both these trends to continue to provide strong organic growth across the business. UXC has also capitalised on the growth opportunities in the rapidly evolving environmental services sector as demonstrated by the contract gains announced yesterday,” said Lord.
The three contracts announced yesterday were in the environmental solutions sector and include:
- Queensland Local Government Infrastructure Services – an extension of the contract for Home WaterWise Service for South East Queensland to provide water conservations services to households.
- EnergyAustralia – a new contract to install energy and water saving devices into Department of Housing homes in Newcastle and the Central Coast of NSW.
- EnergyAustralia’s Energy Saver program – will engage UXC to conduct energy efficient reviews in households and provide water and energy saving devices to up to 75,000 homes in NSW.
“We are also nearing completion of our accreditation to participate in the Australian Government Department of Environment and Heritage Green House Friendly and Greenhouse Challenge Plus programs,” said Lord. “This will enable UXC to market greenhouse neutral products and services, deliver greenhouse gas abatement and form working partnerships with the Australian Government under a national program to reduce greenhouse gas emissions,” said Lord. “This transition from state-based programs to nation-wide will give us a larger addressable market.”
Outlook FY08
“We are in a strong financial position, with an extended track record of growth and a positive earnings outlook for 2008,” he said. “We’re significantly ahead of this time last year. We expect the strong IT spending environment to continue across government and industry sectors. We are confident in our continued ability to meet demand in the rapidly evolving environmental solutions market and to maintain our innovation in developing new solutions in this market, which will be an important part in extending our strong start to the year.”