Melbourne IT posts 1H revenue of $59.6M

More growth expected from the company's core domains, hosting, and email products

Melbourne IT (ASX: MLB) has reported a revenue of $59.6 million for its half year ended 30 June 2014. This compared to revenues of $51.3 million for the same period in 2013.

The company also reported a net profit after tax (NPAT) of $2.7 million, compared to $3.9 million last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) were $3.6 million, down slightly from the $3.7 million reported last year.

Melbourne IT's SMB Solutions division reported revenue of $46.1 million, up from the $38.2 million in 2013. This revenue improvement was due to the acquisition of the Netregistry Group for $50.4 million in February 2014.

“Bundling of different products across new price points in specific brands continues to be the focus of an integrated marketing and sales team. This component-led approach will help deliver growth in the core product offering of domains, hosting and email,” said the report.

Meanwhile, Melbourne IT's Enterprise Services division reported revenues of $13.1 million, up from $12 million in 2013.

The company said that consistent growth in managed services, focusing on Web and digital platforms, helped to deliver a strong half year revenue performance.

However, it also said that underlying gross margin declined slightly from $8.7 million in 2013 to $8.5 million this year. This was due to a change towards managed services and reclassification of licensing costs from operational expenditure to cost of goods sold.

In June 2014, Melbourne IT CEO Martin Mercer said that developing domain and hosting products that people want rather than pumping out offerings for the sake of it will help its turnaround.

For the full year 2013, the company’s SMB Solutions division recorded revenues of $76.3 million, a 7 per cent decline on 2012 when Melbourne IT recorded revenue of $82.2 million.

At the time, Mercer told Computerworld Australia that the company needs to “re-orientate” and develop products that it is “confident there is a market for”.

“We then need to promote the product and sell it properly,” he said. “It’s easy to say but it’s amazing how many companies don’t manage to get it right.”

Mercer added that he is “not planning” to get rid of any existing products but making the best of what Melbourne IT has in the SMB Solutions space.

Follow Hamish Barwick on Twitter: @HamishBarwick

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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Tags financial resultsMelbourne ITNetregistryASX: MLB

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