The company is pursuing global expansion and operational improvement strategies across its mine planning, equipment optimisation, and financial analysis software solutions divisions, and is confident of an improved financial performance in the current year.
“Despite the significant strength of the Australian dollar which results in some overall negative impact on our earnings, we are seeing some early signs of improvement in our business fundamentals this year,” Runge chairman Vince Gauci told shareholders at the company’s annual general meeting yesterday.
“During the year some of the operational issues that were identified by our management team as requiring improvement included developing a more consistent approach to winning the confidence of our customers; marketing our company more effectively and demonstrating to our customers the efficiencies we can bring to their businesses; growing each of our worldwide offices to a critical size whereby we can provide the full range of our company’s offerings; and within our organisation, building better communications across the international boundaries in order to remove any confusion regarding the overall direction and goals of the company.”
Runge’s net profit after tax for the 2010 financial year was $2.3 million compared to $7.9 million in 2009. Earnings before interest, tax and amortisation decreased from $12.7 million last financial year to $5.8 million. Overall its revenue decreased 5% from $83 million in 2009 to $79 million this year.
The company’s strategic vision of continuing to deliver to the global market remains in place, with the opening of offices in Mongolia and Russia evidence of this, managing director Tony Kinnane said.
“Runge established offices in Ulaanbaatar, Mongolia, and Moscow, Russia, this year,” he said.
“Both offices have already proved beneficial with significant consulting work flowing into Mongolia and an improving penetration and support of our software into the Russian market. These offices will grow in the 2011 financial year.
“To allow our global business to operate more effectively we established a Global Leadership Group, or GLG, whose primary tasks include constant detailed monitoring of our key global operational drivers, such as software pipeline, book of work, internal processes and staff utilisations.
“Additionally, the GLG tasked itself to continually improve communications across our global footprint and engage more deeply with customers.”
After a slow July and August, software sales had improved back to levels the company had anticipated.
“The market for Runge’s desktop solutions appears to be strengthening and this aspect, combined with additional focused software sales effort, makes us confident about conversion of the sales pipeline,” Kinnane said.
“With the enterprise offering of Runge, our revised focus to offer and deliver smaller components which focus on customers’ urgent problem areas will get better acceptance, though lower revenue. Market testing of this strategy has been positive.”
He added that GeoGAS had continued to grow, with the move into larger Wollongong premises allowing the company to better serve customers with a cheaper, faster service.
“Ninety per cent of GeoGAS work is tied to underground coal mining compliance testing,” Kinnane said.
“With the coal bed methane industry about to rapidly expand, we are positioning GeoGAS as the preferred supplier in this sector by being able to deliver service from exploration through to reservoir estimation.”
Runge’s share price was 0.5c lower at 61c in morning trade.