The Sydney-based company said it had failed to secure a sufficient number of large contracts during the last six months, and that it expects further contract deferrals and delays in 2003. Kaz acquired local rival Aspect Computing last year in a deal designed to give it the mass to compete for outsourcing deals against international rivals IBM Global Services and EDS Corp.
Kaz now expects revenue in the full year to June 30, 2003 to grow 38% to AUD 350m ($215m), which it admitted marks a major revision on the forecast of 45% growth it gave last September. The company also reduced its profit before interest, tax, depreciation and amortization expectations to either remain flat at AUD 35m ($21m) or to fall 9% to AUD 32m ($19.6m), having previously forecast growth of between 30% and 40%.
Kaz yesterday reported results for the first half of its financial year ending December 31, 2002, which showed a 66% fall in net profit to AUD 2.9m ($1.8m). Revenue grew by 74% to AUD 185.1m ($113.5m), driven by a contribution of AUD 94.6m ($58m) from the Aspect acquisition. If this is stripped out, sales fell by 15%.
The company has recently secured significant outsourcing deals with ING Australia bank, pharmaceuticals manufacturer Chemeq Ltd, and the Australian Air Force, but it remains too small to successfully bid for the tier-one outsourcing deals that continue to be signed in the country. According to ComputerWire’s IT Services Contracts Database, Kaz has failed to win a single one of the 20 largest IT services contracts awarded in Australia in the last five years.
Source: Computerwire
