29th Jun 2016 15:19
LONDON (Alliance News) - RapidCloud International PLC Wednesday said a rise in costs pushed profit sharply down in 2015 after it invested more funds to create new products and services, but said it should return to growth in 2016 and beyond.
RapidCloud shares were trading up 9.4% to 29.0 pence per share Wednesday.
The cloud computing firm reported a pretax profit of MYR499,000 in 2015, compared to a MYR3.2 million profit in 2014, as administrative costs increased to MYR10.2 million from MYR7.6 million.
RapidCloud International had last Friday warned it expects its 2015 earnings to be below what the market had expected, citing a decision to take a "more conservative" view on depreciation, amortisation, deferred tax and deferred revenue after discussion with its auditors.
The company said Wednesday revenue was broadly flat whilst the gross margin was slightly better, but that was not enough to offset the rise in costs.
"2015 was undoubtedly a period of consolidation with significant investment in products, services and the sales and marketing functions across the company against a difficult market backdrop across the Southeast Asia region," said Managing Director Raymond Chee.
RapidCloud launched several new products and services during the period including RapidDocs, ManageWeb and Internet of Things Connectivity Management Solution and won several new contracts including RedBox, the courier service of Air Asia.
The company signed strategic agreements with Hewlett Packard, CS Loxinfo and Oriented Media Group Bhd.
"The commercial agreements now signed, with both national and international organisations, demonstrate the strength of the company's products and services and the board believes the launch of the new products and services, coupled with the strong financial control of all aspects of the group, has positioned the company for significant and sustainable profitable growth during 2016 and beyond," said Chee.
"Trading in 2016 has started in-line with management expectations and the company looks forward to providing further updates to the market in due course," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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