DWS revenue continues to slide as staff headcount bursts to 800

DWS' revenue has continued to slide by another $11.3 million after dropping the daily chargeable rate for one of its major clients.

The Melbourne-based IT outsourcing company reported revenue of $126.1 million for the 2018 financial year ending 30 June, a drop of 8.3 percent. Underlying EBITDA also took a hit, dropping 15.3 percent to $22.9 million, while net profit was also down 8.5 percent to $15.9 million.

The company said that a number of factors were to blame for the middling results, including the decline in daily chargeable rate for a major client, which was partially offset by a jump in the number of consulting staff in its rank.

In the last year, DWS added another 108 billable consultants to its book as a result of managing its staff headcount to keep up with customer demand in the banking and finance sector, bringing the total to 704.

DWS also brought on another 100 consultants when it acquired Canberra-based strategic management and IT consulting provider Projects Assured for up to $43 million in June, taking the combined group's consultant workforce to more than 800. DWS expects Projects Assured to be earnings accredited by FY19 and generate $35 – 40 million in revenue.

The company said the Projects Assured acquisition would help DWS put itself in front of potential clients in Canberra, particularly federal government customers, which currently accounts for 14 percent of DWS' revenue. The biggest money-maker for DWS is the banking and finance sector, which accounts for 44 percent of revenue.

DWS said it would continue to make adjustments to its workforce to align with customer demand as it stretches its footprint in Canberra.

Despite a less-than-stellar financial performance, DWS said in its financial report that its liquidity remained strong with $8.13 million cash on hand.

"DWS has diversified earnings and has enhanced its service offering as a result of the acquisition of the Canberra based Projects Assured business," the company said in its financial report.

"The DWS will continue to focus on client service, growing revenue and margins. DWS' financial position remains sound with conservative levels of debt and strong cash flow generation."