Credit: Cirrus Networks
Delays in Cirrus Network’s $15 million managed services contract with Icon Water has held back its revenue at the end of its financial year.
This is according to the managed services provider’s audited results for FY23, which outlined that the contract did not start in the second half of the financial year as expected.
The delays, the company said, were due to the client not yet completing its implementation project.
“This contract is now anticipated to make a small initial contribution in Q1 FY24 and increase throughout the financial year as implementation milestones are achieved,” Cirrus said in a statement to the Australian Securities Exchange (ASX).
Despite this, the company claimed it delivered recorded consolidated revenue for the 12 months to June 30 of $112 million, an increase of 8 per cent on the year prior – in line with its unaudited results, which were released last month.
Not mentioned in its unaudited results was that managed services revenue reached $15.4 million for FY23 with gross margin at 35 per cent, which was in line with expectations despite on-boarding costs associated with new contracts.
The Icon Water contract, together with a “strong” pipeline of opportunities – including an unspecified number of large tenders that are awaiting final outcomes – has given Cirrus a “high degree of confidence” that its managed services revenues will grow in the financial year ahead and into the future.
“The FY23 result is a very pleasing outcome for the business continuing its renewed momentum. The speed, success and sustainability of the business decisions has led to another strong half result, and a record year for all our key indices,” said Cirrus managing director Chris McLaughlin.
“Growing revenue and margins on a lower annualised overhead cost run rate comes from having quality staff. To this end I want to recognize and thank the wonderful Cirrus staff across all our locations who have continued to focus on and deliver great client outcomes and enhanced business value.
“The significant ongoing momentum, growing pipeline of opportunities and enviable client base, coupled with a solid debt free balance sheet and $13.9 million of cash at year end, puts the business in the strongest position it has ever been going into a new financial year and provides confidence to deliver continued improvement in FY24 earnings.”
McLaughlin added that although the company is pleased with the result, it is expected that that Cirrus can improve its execution and financial performance in the future.
“Strategically we are very well placed in our key locations with large total addressable markets serving a very high-quality client base across government, major resources companies and other enterprise level customers,” he said.
Specifically, the outlook for FY24 is positive, the company claimed, based on the commencement of the Icon Water contract, a strong backlog, a positive pipeline of opportunities and a strategic focus on higher margin services revenue.
