Expands and Continually Innovates Infrastructure Services — Strives to Develop Best-of-breed Solutions — Secures a Leading Position in IT and Security Markets in the Region
News Release – August 25, 2014
(Hong Kong, 25 August 2014) – Automated Systems Holdings Limited (“ASL” or “the Group”) (HKEx stock code: 771), a leading IT services provider in the region, announced its interim results for the six months ended 30 June 2014 (the “Review Period”). During the Review Period, the business environment remained challenging, together with conservative customer sentiment and increasingly fierce competition resulted in a record of revenue at HK$694.2 million (same period in 2013: HK$808.4 million).
Gross profit margin for the first six months was 8.1% (same period in 2013: 9.3%). During the Review Period, the profit attributable to the Company’s equity holders was HK$34.1 million (same period in 2013: HK$9.7 million), higher by 252.9% compared to the corresponding period last year. Such increase was mainly attributable to a one-off gain on the deemed disposal of partial interests in a subsidiary, i-Sprint Innovations Pte Ltd (“i-Sprint”) during the Review Period1 . The aforesaid one-off gain was partially offset by the substantial investments in business development made by i-Sprint which has become the Group’s associate company after the disposal, and the decrease in the gross profit margin of the core information technology (“IT”) business of the Group. Basic earnings per share for the Review Period were HK 10.94 cents, up 252.9% compared with the corresponding period last year.
The Group maintained a healthy balance sheet during the Review Period. The Group’s net cash stood at approximately HK$127.5 million with a working capital ratio of 1.74:1. For the six months ended 30 June 2014, orders newly secured by the Group amounted to approximately HK$807.6 million. As of 30 June 2014, the order book balance was approximately HK$902.6 million, an increase of HK$88.5 million compared with the corresponding period last year. The Group’s outstanding borrowings amounted to HK$22.0 million as at 30 June 2014.
Mr. Simon Leung, Chief Executive Officer of Automated Systems Holdings Limited said, “In the Review Period, the Group continued to win infrastructure, solutions and high-value service contracts from prominent players in different industry sectors, which demonstrated the Group’s leading position remains strong in the markets.”
During the Review Period, the product sales and service revenue were HK$376.5 million and HK$317.7 million (same period in 2013: HK$436.0 million and HK$372.4 million). Product sales and service revenue contributed 54.2% and 45.8% of the total revenue respectively, compared to 53.9% and 46.1% with the corresponding period last year. In the Review Period, commercial and public sector sales contributed 40.7% and 59.3% to revenue respectively, compared to 42.9% and 57.1% for the corresponding period last year.
In the public sector, the Group won a significant tender from a statutory body for the provision of personal computer support and related services. This contract lasts for 63 months and covers approximately 20,000 devices, spanning across the customer’s headquarters and several hundred offices in Hong Kong. Winning this tender demonstrates the Group’s strong experience in long-term and sizable managed services, including helpdesk and hardware maintenance support, one of the Group’s business focuses.
In the commercial sector, the Group responded to the customers’ demand for various IT solutions and high value-added services for cost control and higher operational efficiency. Significant wins included the supply of a document management solution for an entertainment company and the provision of relocation services of IT equipment for a financial institution.
During the Review Period, the Group continued to benefit from regional opportunities arising from growing security concerns. In addition to securing deals with financial institutions in Hong Kong, the Group continued to garner deals through i-Sprint, a regional leader in Identity, Credential and Access Management (ICAM) solution services for global financial institutions and enterprises. Orders included the provision of i-Sprint’s AccessMatrixTM security solutions to its first second-tier bank in Thailand and also to a Singapore bank with service deployment across its offices located in three countries in Asia Pacific.
To strengthen the Group’s capability to provide an integral security mix, the Company brought in Great Ally Investments Limited (a strategic investor under Peregrine Greater China Capital Appreciation Fund, L.P.) to subscribe new shares of i-Sprint with a consideration at US$9,850,000. Upon completion, the Group has become a major shareholder of i-Sprint. Through complementing each other’s strengths, the Group expects to create greater synergy with i-Sprint.
Since the Hong Kong economy still plays a major role in the future development of the Group, the Group will keep a close eye on the anticipated business opportunities arising from fast-growing industries, such as the aviation industry. Meanwhile, the Group will hone its strategy to accommodate in particular the Hong Kong government’s IT initiatives, for example, the adoption of open source applications by government departments, electronic information management, web accessibility and the government’s human resources management services.
Apart from continuous effort to boost the infrastructure and managed services business, the Group will continue its strategy to develop various kinds of advanced IT solutions, for example, business intelligence and enterprise content management solutions. The Group will seek close collaboration with world-leading partners to develop best-of-breed solutions that are based on the Group’s respective industry-leading solutions in hardware, software and one-stop professional services.
Among IT solutions, the Group will focus on developing security solutions to address the trends of sophisticated threats, expanding regulatory compliance requirements, data protection, mobility and cloud computing. The Group will not only partner with i-Sprint but also work closely with other providers of global security solutions. By doing so, the Group expects to offer more comprehensive solutions and secure a leading position in the IT and security markets in the region. In addition, the Group will invest in facilities, technologies and talent to provide the best service for the regional customers.
Mr. Leung concluded, “As a leading Asia IT services and solution provider, we are committed to become the most trustworthy and professional IT partner for our customers. Our services and solutions enable our customers to achieve the strongest market competitiveness and excellence in service. We will continue to optimise the Group’s human capital efficiency, refine and streamline the operation process, improve services and create greater synergies with Beijing Teamsun Technology Co., Ltd., our parent company, to improve the Group’s core IT business and expand the Group’s market coverage.”
1 Details of the deemed disposal are disclosed in the Group’s announcements dated 28th January 2014 and 12th February 2014
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