UPDATE 1.30pm: Shares in ASG Group plunged 20 per cent after the IT services company posted a first-half loss of $7 million, down from a $7.2 million profit in the previous corresponding period.
The bottom line figure was affected by a $15.6 million writedown in legacy assets, contract negotiations and other non-recurring items, which the company flagged earlier this month.
The result came on revenue of $75.8 million in line with the previous corresponding period.
ASG said the results highlighted the positive impact of the rapidly expanding 'new world' computing services contrasted with the worldwide contraction and margin pressure in traditional IT services areas.
Chief executive Geoff Lewis said the company recognised that the financial costs of its actions to address changes that were transforming the IT industry had been too high.
ASG said it was targeting annualised savings of about $8 million through "realignment initiatives".
The company said it was also implementing a more disciplined and economical approach to competing for contracts.
"The realignment produces a much lower cost base and risk profile for our business development initiatives, diverting focus away from high-cost, highly competitive bid processes unless ASG has a well-defined competitive advantage," Mr Lewis said.
ASG said the market for traditional IT services was likely to remain challenging for the remainder of the year.
However ASG said it expected second half revenue to surpass the first by as much as 15 per cent.
"In particular, our reduced cost base and lower capital expenditure commitments will result in much improved overall cash flow," the company said.ASG shares closed down nine cents, or 20 per cent, at 36 cents.
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