WirTek is developing well, with significant growth and a solid bottom line. Expectations for the future are favourable and implementation of the company’s internationalization strategy has begun.
GROWTH OF 28 PERCENT
Net profit for the first six months of the financial year 2005/06 was 10.8 million DKK, a growth of 28% compared to the same period last year. This business growth met management’s expectations because leadership initiatives for the past half year have been focused on gearing the company up for a more long-term growth, rather then exploiting any possibilities there have been for large growth over the short-term.
Half-year results before taxes of 1.69 million DKK were considered by management to be extremely satisfying. The result includes costs of over 0.9 million DKK allocated for the initiation of the company’s internationalization strategy.
ACTIVITIES IN THE FIRST HALF OF 2005/06
In the Autumn of 2005, WirTek’s board of directors decided to implement a long-term international strategy, with emphasis on significant growth in revenue, capacity, and earnings. The decision was made based on the very favourable market conditions in the telecommunications sector and the continued expansion of the outsourcing of software development services that are occurring on a global scale. Important factors for the success of this strategy involve establishing sales and project offices in a number of western European countries and establishing a near-shore development office in Romania.
This internationalization strategy ensures that WirTek will be able to strengthen its competitive advantage and increase growth possibilities considerably. In the future, the company will be better able to compete price-wise with software development companies from countries that can offer lower prices. WirTek will also be able to add considerably more value to customers by being able to coordinate outsourcing projects locally. This will provide better protection for customers from the complexities inherent in near/offshore outsourcing (such as cultural differences, language differences, physical distance, and political conditions).
In the first half of the financial year 2005/06 management has used considerable resources on preparing the company in the best possible way for significant future growth. Important measures included:
- Strengthening management by hiring an HR Manager and a QA Manager
- Strengthening sales and marketing
- Establishing a Romanian development centre via an acquisition
- Focusing on increasing organizational and HR capacity in order to handle significant future employee growth
- Strengthening quality control and processes through the implementation of ISO 9001:2000. (WirTek’s Danish subdivision became certified at the start of May this year.)
- Preparing the company so that it can be registered on the First North marketplace.
MERGER WITH WIRTEK GROUP A/S
At the company’s extraordinary general meeting on the 27th April, 2006, it was decided that WirTek A/S would merge with WirTek Group A/S and that the merger would take effect from the 1st October, 2005.
THE FUTURE
WirTek is striving to acquire gross proceeds of 35 million DKK through listing on the First North marketplace by June 2006. These proceeds will be used to implement the company’s internationalization strategy.
Large investment in implementation of the company’s internationalization strategy is expected to lead to growth rates of 30–40% in business in the coming years. Over the short-term, however, these investments will have an expected negative effect on the company’s bottom line. The total end of financial year results before taxes and interest is expected to be at 722,000 DKK.
About Wirtek
Wirtek A/S is a Danish consultancy services company with strong competences in outsourcing of software development product testing services. We provide our customers with flexible services of high quality at competitive prices from our Development and Test Center in Romania. Our competencies include web-based solutions and portals, mobile solutions as well as embedded systems. Wirtek focuses on building long-term customer partnerships and a win-win relation that creates added value for our customers.
