HiTech’s Growth Hinges on Government ICT Contracts and Expansion Risks
HiTech Group has reported a robust first half for FY2025, with net profit before tax up 14% and EBITDA rising 8%, underpinned by strong demand for ICT talent and services. The company also declared a fully franked interim dividend of 5 cents per share, signaling confidence in its growth trajectory.
- Net profit before tax increased 14% to $4.73 million
- EBITDA rose 8% to $4.49 million with a 13% margin
- Interim fully franked dividend of 5 cents per share declared
- Cash reserves strong at $9.7 million with zero debt
- Strategic focus on government ICT contracts and regional expansion
Strong Financial Performance in H1 FY2025
HiTech Group Australia Limited has delivered a solid set of half-year results for the six months ending 31 December 2024, reflecting both operational resilience and strategic positioning in the competitive ICT services sector. The company reported revenue of $34.78 million, with gross profit climbing 3% year-on-year to $6.99 million, maintaining a steady gross profit margin of 20%.
More notably, EBITDA increased by 8% to $4.49 million, translating to a statutory EBITDA margin of 13%. Net profit before tax surged 14% to $4.73 million, while net profit after tax jumped 29% to $3.44 million, underscoring improved operational efficiency and cost management.
Dividend Declaration and Balance Sheet Strength
Reflecting confidence in its financial health, HiTech declared a fully franked interim dividend of 5 cents per share. The company’s cash balance remains robust at $9.7 million, supported by zero debt, which provides a solid foundation for pursuing growth initiatives without compromising financial flexibility. Net tangible assets per share increased by 32% to 25 cents, signaling enhanced shareholder value.
Strategic Outlook: Capitalising on ICT Demand
CEO and Managing Director Elias Hazouri highlighted the company’s strategic advantage amid sustained demand for ICT talent and services, particularly within government sectors. Federal mandates for critical IT programs are driving a need for specialised technology expertise, positioning HiTech as a trusted partner with multiple active client mandates and inclusion on key Federal Government supplier panels.
HiTech’s focus on long-term supplier agreements and recurring income streams underpins its competitive edge. The company is actively pursuing new tender opportunities across federal and state government agencies, aiming to leverage its industry-leading margins and strong cash reserves to fund regional expansion and targeted acquisitions.
Hazouri emphasised that HiTech’s financial strength and zero debt status equip it well to capitalise on emerging opportunities, reinforcing its commitment to delivering sustainable, long-term shareholder value.
Looking Ahead
While the first half results demonstrate HiTech’s solid footing, the company’s ability to maintain growth momentum will depend on continued government spending on ICT programs and its success in securing new contracts. The evolving technology landscape and competitive pressures in the ICT recruitment and consulting space will also be key factors to watch.
Bottom Line?
HiTech’s strong H1 performance and strategic positioning set the stage for growth, but execution on government contracts will be critical.
Questions in the middle?
- How will HiTech navigate competitive pressures in the ICT recruitment market?
- What impact will government budget allocations have on upcoming contract opportunities?
- Could targeted acquisitions accelerate HiTech’s regional expansion plans?
