www.norconplc.com
Providing project management and outsourcing services for operators of telecommunications networks including fixed line and mobile telephone systems and data networks, assisting them with the installation, operation or optimisation of telecommunications systems and to countries seeking advice on regulatory matters, defence systems, equipment and command and control facilities.
Norcon secured important “beachheads” in its first half
Norcon (LON:NCON), the provider of services to telecoms network operators, reported this morning that it secured “important new beachheads” into key expansion markets during the first half of this year.
The firm, which announced interim results today, said that progress made in winning new clients in H2 2010 continued into the first half of 2011, and that efforts to diversify the business into new geographies have been successful – generating new business for the company in South East Asia, Europe and Central Asia.
These new contracts do not initially generate individually large volumes of revenue. But they are in line with the firm’s policy of taking on small initial contracts that require highly-qualified personnel with a view to growing revenues by demonstrating to clients the added value to their operations of Norcon’s presence.
Norcon said that it had also been successful in renewing key contracts in core Middle Eastern markets, as well as renewing and extending important client relationships in Indonesia and Abu Dhabi.
Norcon said that as well as making progress in diversifying its list of clients, its longer-term clients are actively considering the impacts of new technologies in the telecoms space, such as 4G, LTE and NGN (Next Generation Networks), and they are looking at further investments in these technologies. The firm said this market dynamic has enabled it to improve its first-half revenue performance year on year.
As far as figures for the first half are concerned, the firm improved its H1 revenue to US$35.9 million (H1 2010: US$34.2 million) in spite of difficult economic conditions around the world. The firm’s gross margin declined from 19 per cent to 18 per cent, which reflected the impact of starting up new contracts and pre-tax profits came in at US$2.4 million (H1 2010: US$2.8 million).
Net cash at the firm was US$1.1 million at June 30, compared with US$5 million a year earlier, although Norcon said that net cash improved by more than US$7 million since the end of June.
“Our ongoing contracts and high levels of client retention have given us a solid base on which to successfully expand our activities into new clients and territories in this first half of 2011,” said Trond Tostrup, Norcon’s chairman. “Whilst many of our new contract wins are currently small in volume terms, they represent important new beachheads for us into key expansion markets and have the potential to grow into larger long term relationships over time. We have good visibility through the fourth quarter of 2011 and we look forward to another profitable outcome for the year as a whole whilst remaining focused for the long term on developing and diversifying our business.”
