CAE Tech Services top and bottom lines slide in fiscal 2012
Project drop-offs, competitive sales landscape and higher overheads fingered
Rising overheads and a slowdown in project work hit the top and bottom lines at Watford-based CAE Technology Services in fiscal 2012 ended June.
The Cisco and HP Gold certified reseller saw sales dip five per cent on a year ago to £47.3m, according to a filing at Companies House late last week.
"This was as a result of 2011 numbers including a small number of one off projects that it was anticipated would not be repeated in 2012," the director's report stated.
The drop in sales was also attributed to a "number of partnership accounts where such arrangements were not extended into 2012", the company added.
In a bid to offset this not-unexpected sales drop, CAE embarked on "acquiring" new customers and targeting existing ones with a bigger bent on services and "advanced technologies".
"The number of new customer wins did not entirely replace non-repeatable business during the year but it is anticipated that this strategy will return growth for Fy13," the director's report added.
The "hyper competitive environment" among resellers dampened hardware and some services margins, which fell by one per cent at CAE in the year. This dynamic is here to stay, the firm warned.
Admin expenses went up two per cent to £9.6m, "primarily" due to a rise in headcount from 112 workers to 121.
Profit before tax fell to £704,586 from £1.97m in fiscal 2011 and after a tax break, CAE retained a profit of £938,116 for the 12 months, down from £1.376m.
CAE said it has devised "flexible commercial models" that help customers make more informed decisions between op-ex and cap-ex spend but which has had a "detrimental impact" on profits.
"That is likely to continue into FY13 but will allow CAE to operate successfully as demand on technology resellers continue to adapt," the director's report stated. ®