SMS Management turns ship after hiring CEO from Infosys

SMS Management & Technologies has returned to profit growth following two years of declines.

The publicly listed IT service provider grew net profits $4.3 million, or 34 percent, to $17 million. Revenue reached a record high of $356 million, a rise of $41.8 million, or 13 percent.

It follows back-to-back years of mixed results, with net profit dropping 31 percent in 2013 and 40 percent in 2014. Former chief executive Thomas Stianos blamed last year's poor result on declining client demands and weak market conditions. Stianos stepped down as CEO at the end of the calendar year after 26 years with the company.

Jacqueline Korhonen, who stepped in to replace Stianos in December, said the turnaround was a result of refocusing on its managed services business, which now accounts for 10 percent of revenue, as clients shift from capex to opex.

“In 2015, we continued to capitalise on a structural trend in the market where capital spend is being replaced by operational expenditure through procuring infrastructure- and software-as-a-service," she said.

Client demand was also on the up, with SMS winning contracts worth $411 million, a rise of 18 percent.

SMS was toasting smart acquisitions, as both Birchman, which it bought for $28 million, and Indicium, which it bought for $27.8 million, "exceeded profit targets". Both acquisitions will be fully integrated next year.

SMS has continued to grab top-tier talent with dual appointments from outsourcer Unisys. Former Unisys APAC vice president of sales Phil Heggie has become managing director, sales, at SMS, while Unisys APAC vice president of delivery Nick Kiossglou is heading up the delivery team. Head of marketing for SAS James Foster was also brought on board as SMS chief marketing officer.

A $4.2 million hole in revenue left from mining customers after the iron ore downturn was filled by the uptake of managed services in the financial and government verticals. Finance is now the largest industry segment for SMS, followed by government and telecommunications.

SMS partners with a bevy of tier one vendors, including Microsoft, Amazon Web Services and IBM.