Connxion reaffirms FY11 guidance

Data and transaction services provider Connxion Ventures (ASX:CXN) has maintained its FY11 guidance of $38 million in revenue and $4 million ebitda for FY11.

The company recently reported a 500 per cent increase in Q1 profit to $5.5 million. Ebitda was $930,000, with an ebitda to sales margin of around 15 per cent.

In a statement, the company confirmed its guidance, noting that sales are typically weighted in the second half.

Margins are expected to continue to improve as Connxion starts to see income from its recently-established Singapore regional operations hub, it said in a statement to investors.

There are now 30 employees at the Singapore HQ, and back-office functions such as finance and administrations are currently being moved in a process pegged for completion by the end of Q2.

Connxion earned around $2.3 million, or 30 per cent of its revenue, from its Asian operations – 13 per cent from Hong Kong and China, and 17 per cent from Singapore. The remaining 70 per cent came from Australia.

During the quarter, Connxion also made progress formalising its joint venture deal with Chinese IT services provider GDS.

The deal will give Connxion access to nine T4 data centres across China, providing the capacity and scale needed to bid for multi-million dollar e-billing and data services contracts, the statement read.

Connxion reported an 88 per cent wider FY10 net loss of $4.8 million, even while revenue grew 223 per cent to $12.6 million. The ebitda loss was $2.9 million.

Copyright © 2010 IDG Communications, Inc.

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