AST is at risk of not meeting its targeted 9% margin for the first half of its financial year as a result of cancelled tenders and delayed customer commissioning.
The group says in a quarterly update that its performance in the first quarter was solid but slower.
Cash generation continued and AST increased its market share, with revenue growth exceeding that of the market.
However, the group says growth rates are substantially lower than historically, in line with global economic pressures.
It says 75% of revenue comes from infrastructure services and IT solutions. Infrastructure services had a good quarter, and IT solutions is on budget.
The remaining business units provide 25% of revenue. The products business experienced a slow quarter in line with industry trends while secure transaction services also performed below expectations.
The group blames that on sluggish biometric adoption rates as well as the fact that campus smart card roll-outs were behind targets.
Bentley West, AST`s strategic management consulting arm, was slow although the outlook for the six months is on budget. Business services is profitable and on budget for the first quarter.
The performance in the UK was solid with continued cash generation. The products market in Australia is still depressed, while GEM Consulting is now meeting budget.
The group says the margin pressure is tempered by its long-term annuity contracts and continued focus on efficiencies and costs.
It says it has taken significant steps to enhance its competitiveness by reshaping the business and cutting staff at the sales, general and administration level.
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