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Gruden Group boosts revenues with important government contract
2 minute read
The Gruden Group (ASX: GGL) announced on Tuesday morning that it had been selected by the New South Wales Small Business Commissioner (OSBC) to deliver an integrated digital solution to enable it to interact more efficiently and effectively with small businesses. This represents a relatively large client base with approximately 700,000 small businesses operating in New South Wales.
This development is positive from a number of perspectives in that the $2.93 million contract will immediately generate revenue in fiscal 2017, and out to 2019 with the prospect of a further two 12 month extensions beyond 2019.
However, as the New South Wales government is already one of GGL’s clients it also serves as an endorsement of the company’s effectiveness in assisting enterprises including government instrumentalities to operate efficiently in a digital environment.
On this note, GGL’s Chief Executive Tim Parker said, “Our technical expertise and capabilities have been proven time and time again and this is yet another example of where we excel in this space”.
Another factor to bear in mind is that this comes on the back of other successes in the government arena including a recent agreement inked with the Public Records Office of Victoria.
Looking at GGL’s overall business, the Gruden Government division accounted for 30% of revenue in fiscal 2016 with Performance Marketing being the largest income generator with 36%.
Consequently, this contract supports an important part of the company’s business, particularly given the division also counts the Australian Government as one of its clients.
Importantly, contracts such as this also assist GGL in enhancing its own product offerings and areas of expertise with Parker saying, “The agreement also provides the opportunity for Gruden to work closely with OSBC in scaling the solution to suit other government and commercial requirements”.
However, how rapidly this coms to bear remains to be seen, and as such this is a speculative investment. Investors should seek professional financial advice if considering making an investment.
Gruden boasts blue-chip client base
As can be seen from the snapshot of GGL’s four divisions there are a number of blue-chip clients as well as major enterprises, including global entities.
Established partnerships with global digital players assists in winning new business
GGL has also forged strong strategic partnerships along the way with major global players in the digital IT space.
As can be seen below, these along with the group’s status as preferred supplier across several government departments leave it well-positioned to successfully tender for new work.