According to its most recent ASIC filing, Ergo posted sales of $77 million for the 12 months to 30 June 2011 – a 62% year-on-year increase and nearly triple its 2008-09 revenue of $26 million – but chief executive Eugene Cora said the company could go even better and reach a milestone $100 million of Australia business by the end of June 2012.
Cora said he was “very pleased” with the 2010-11 financial year, adding that Australia was expected to grow by up to 35% in 2011-12, while Asia could grow even more.
He said Australia comprised about 60% of Ergo’s global revenue, but that percentage is forecast to decrease as Asian markets rise.
Ergo will open offices in Vietnam in about three months and is considering moving into Japan by the end of 2012, Cora said. That follows pushes into Indonesia, Thailand and Phillipines last financial year.
“It was very successful and probably a defining 12 months. We grew overall by over 50% in the eight countries we operate in… We remain debt free and have been since inception.”
However, despite the surge in sales, Australian net profit only rose by 2% to $2.3 million. Cora said the relatively small rise in net profit concealed a largely unchanged underlying profit margin, as Ergo had reinvested additional gross profit back into the business.
He said Ergo had “finished the year in a strong position” as it was now represented in most of Asia and managed over 75 clients in the region.
There had been “a steady stream of new clients, service extensions and renewals” in 2011-12, including new deals with Coles in Australia, he said.
Cora said that doing business in Australia was easier, but it was a more mature market with more competition. He added that while there was less competition in Asia, challenges included infrastructure and bureaucracy.
Ergo’s procurement model hinges on its exclusive deal for the Noosh workflow platform in this market, but Cora attributed the company’s impressive growth to its 180 staff rather than its technology.
He said Ergo’s highly skilled workforce and a low staff turnover gave the company a “strategic advantage”.
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