CFA Society Singapore
SINGAPORE (Apr 25): Procurri Corp saw its earnings for 1Q18 grow sixfold to $1 million from $164,000 a year ago on higher revenue which mainly resulted from its higher-margin lifecycle services business segment.
Group revenue grew 29.2% to $49.5 million from $38.3 million a year ago, as contributions from both its IT distribution and lifecycle services business segments grew by 10.6% and 105.4% to $34 million and $15.5 million, respectively.
While the IT distribution business’s revenue growth came on the back of better performance from the Americas, the increase in the lifecycle services business’s revenue was mainly due to better performance across the group.
Overall gross profit margin increased by 2.6 percentage points to 36.2% in 1Q compared to 33.6% a year ago as the lifecycle services segment saw its margins rise to 61.5% in 1Q18 from 38.9% in 1Q17, due to the shift in the delivery of maintenance services from being primarily based on outsourcing to one which is integrated with in-house capabilities
This comes despite lower gross profit margin from the IT distribution business segment to 24.7% from 32.3% previously, which Procurri says is a result of the group’s strategy to capture higher market share in the industry and diversifying the brand mix of the hardware sales at the expense of lower margins.
Administrative expenses grew 23.5% to $12.1 million from S$9.8 million previously, mainly after booking three months of maiden expenses from Rockland compared to the one month of such expenses in 1Q17.
Sean Murphy, Procurri’s Chairman and Global CEO, says the group is on track to return to profitability for FY18.
“I am glad to see that our strategic positioning to assist global enterprises in their digital transformation is beginning to be reflected in our financial performance. We are on track to achieving our goals as set out in our corporate and business Update announced on 30 January 2018, including our aim to bring the group back to profitability for the full year ending 31 December 2018,” says Murphy.
Shares in Procurri closed flat at 25 cents on Wednesday.