CAE Technology Services is banking on targeting new customers and higher-end services to kick-start growth in its 2013 fiscal year, as FY12 numbers show sales and profits both suffered a decline.
Accounts filed with Companies House this week show that the Watford-based Cisco, Microsoft and HP Gold partner saw turnover for the 12 months to 30 June 2012 declined 5.1 per cent to £47.3m. Operating profit was £764,677, compared to more than £2m in the prior year. However, net profit stood at £938,166, as accounts point to a tax rebate of £233,530. In FY11 net income was almost £1.4m.
Shareholders' funds rose nicely last year, increasing by more or less £1m to £4m. Staff numbers were also on the up, going from 112 to 121, with the bulk of new heads being appointed to admin and engineering roles. Consequently, CAE's total wage bill grew from £6.3m to almost £6.7m, although total directorial emoluments fell from £208,471 in FY11 to £174,653 last time out.
The directors' report for the year outlines that the FY12 revenue drop can, in part, be attributed to the number of big-ticket, one-off deals that were closed in the prior year as well as "partnership accounts [that]... were not extended".
To ensure growth in future years, the company claims "the way partnerships [are] viewed has fundamentally changed", and the watchword for the years to come is winning new custom and driving sales of higher-end technology and services.
"During [FY12] the focus was on acquiring new customers and positioning CAE to existing customers with a greater emphasis on services and advanced technologies," adds the report. "It is anticipated that this strategy will return growth for FY13.
The report goes on to claim that money spent on staff and product and service offerings hit the bottom line in FY12, and are liable to do so again in the current year, but that such investments will position CAE well for the coming years.
"Further development in customer propositions in areas of storage, virtualisation, datacentre, collaboration, digital media and new flexible commercial models to allow customers to make better decisions between operating and capital spend is a committed long-term strategy which has had a detrimental impact on immediate profitability," explains the report.
"That is likely to continue into FY13 but will allow CAE to operate successfully as demands on technology resellers continue to adapt."
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