Proact: Fiscal 2Q14 Financial Results

Proact IT Group announced its financial results for the second quarter anf half year of 2014 ended June 2014:

For the first six months

• Revenue increased by 4% to SEK 1,165 (1,123) million, and revenue increased by 1% when adjusted for currency effects.
• EBITDA amounted to SEK 69.6 (53.6) million. When adjusted for non-recurring items in the first six months of 2013 in the amount of SEK -9.6 million, EBITDA increased by 10%.
• Profit before tax amounted to SEK 38.1 (7.5) million. When adjusted for non-recurring items in the first six months of 2013 in the amount of SEK -14.8 million, profit before tax increased by 71%.
• Profit before tax amounted to SEK 27.2 (6.0) million.
• Earnings per share amounted to SEK 2.75 (0.23).
• Return on equity over the last 12 months amounted to 20.0 (12.2).

For the second quarter

• Revenue increased by 4% to SEK 573 (551) million, and revenue increased by 1% adjusted when for currency effects.
• EBITDA amounted to SEK 34.6 (16.5) million. When adjusted for non-recurring items in the second quarter of 2013 in the amount of SEK -15.8 million, EBITDA increased by 7%.
• Profit before tax amounted to SEK 20.6 (-8.9) million. When adjusted for non-recurring items in the second quarter of 2013 in the amount of SEK -21.0 million, profit before tax increased by 70%.
• Profit after tax amounted to SEK 16.4 (-8.1) million.
• Profit per share increased to SEK 1.65 (-0.97).

Martin Ödman, MD of Proact, commented:
“The business has continued its positive development during the quarter. Profit before tax amounted to SEK 20.6 million, representing an increase of 70% compared with the same period last year. The company has increased its profit by 34% over the last 12-month period. I view this positive development of profit over the past year despite weak market development as a clear show of strength. Revenues during the period amounted to SEK 573 million, which represents an increase of 4% compared with the same period last year, and revenues increased by 1% when adjusted for currency effects. Business units Nordic and Benelux, and Spain, together with Proact Finance, have met expectations, while the profits of business units UK and East have been lower than expected.
“Our strategic decision to focus on integrated systems has paid off in terms of both revenues and profit. A number of new contracts have been concluded in this field throughout the period. Our cloud services initiative has also continued to develop well. New contracts worth SEK 24 million have been concluded during the quarter and total cloud revenues are up by 42%.
“A customer survey has been carried out during the period which indicates very high levels of customer satisfaction. For example, customers value the expertise and experience available at Proact and are of the opinion that we make a positive contribution via these fields, helping customers’ businesses to become more efficient and minimising risks. Of course, this is very pleasing as this is precisely what we intend to do; alongside our objective within our focus area, which is to maintain uniquely outstanding expertise among our staff.
“The improvement in profitability over the last few quarters has given us the opportunity to focus even more strongly on the long-term development of the company. This gives us greater opportunities to ensure that the company meets its financial targets over time.”

The company has more than 3,500 projects behind it, along with vast information volumes which are managed at the Proact data centre. It has more than 630 employees and conducts business in Belgium, Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Norway, Slovakia, Spain, UK, Sweden and the Czech Republic.