Australian-based CSG believes it can turn around its latest losses, blaming them on “substantial headwinds” after it suffered a statutory net loss after tax of $150.1m for this financial year.
That compares to a $43.7m loss last year. The company exited its enterprise business earlier this year, forcing it to write down its assets by $116m. EBITDA copped a $151m loss, falling from a $32.6m loss last year and while revenue fell eight percent to $225.7m.
The $116m non-cash impairment accompanied a $39.3m charge for provisions relating to the enterprise solutions business. The company says the shrinking revenue came from lower print equipment sales among the enterprise segment, lower SME print sales and lower display sales.
Julie-Ann Kerin, chief executive of CSG, says, “The board and management reacted decisively and has repositioned the business for a return to growth in FY19. Cost-out initiatives expected to generate $5m in FY19 have quickly been implemented. Incremental initiatives to deliver an additional $2.7m of cost savings in FY19 are also underway.
“We are already starting to see the benefits of a simplified business model with three clear operating segments.”
CSG announced its decision to stop investing in its enterprise business in June and instead focus its efforts on restructuring its SME business. The restructure has CSG splitting the SME segment into three operations: technology; print and display; and finance. The technology segment will focus on the SME segment and will continue cross-selling CSG’s technology-as-a-subscription bundles to existing customers. The print & display business will employ a dedicated print-only sales force that’s incentivised to recruit new customers, while the finance business will focus on growing the lease book.
CSG says its technology segment grew its subscription seats by 40 per cent to 22,326. Revenue from technology-as-a-subscription solution rose 42 percent to $42.8m. CSG’s technology subscription includes print, communications, desktop and display solutions, bringing in an average of $95 per seat per month.