Coming off a year that saw it crack the $340-million mark in annual revenues for the first time, Ottawa-based Calian Group set another new high-water mark for sales in the first three months of fiscal 2020.
Calian (TSX:CGY) said Wednesday it posted revenues of $99.2 million for the quarter ending Dec. 31, up 24 per cent from the same period a year earlier. The Kanata firm booked a net profit of $4.3 million, or 55 cents per basic share, up from $3.4 million, or 49 cents a share, in the first quarter of 2019.
It marked the sixth quarter in a row that Calian set a new record for revenues and stretched the firm’s streak of consecutive profitable quarters to 73.
Three of Calian’s four main business divisions made gains in the first three months of fiscal 2020, led by its advanced technologies segment. Revenues at the Saskatoon-based tech operations jumped from about $24 million in the first quarter of 2019 to $40 million this year thanks to projects such as its new custom mobile wireless product.
Revenues from Calian’s health segment rose 10 per cent to $30 million as demand grew for its clinical and psychological assessment services. Meanwhile, strong sales of its cybersecurity technology helped fuel a nine per cent rise in IT revenues, which came in at about $14 million.
Only the firm’s training division saw a slight decline, from $15.8 million in the first quarter of 2019 to $15.1 million in the first three months of this fiscal year. In a statement, CEO Kevin Ford blamed the drop on the “pace of demand on our core training contracts and a focus on securing new business” in the sector.
Calian also raised its full-year guidance following the strong quarter. After projecting fiscal 2020 revenues of $365 million to $395 million back in November, the firm now says it expects to bring in between $380 million and $410 million for an adjusted net profit in the range of $2.50 to $2.80 per share.
Company executives touted the recently announced acquisition of local health-tech ventures Allphase Clinical Research Services and Alio Health Services, saying the deal diversifies Calian’s customer base into pharmaceuticals, home care and hospitals while adding “sophisticated software” to its stable of technology.
During a conference call with analysts late Wednesday afternoon, chief financial officer Patrick Houston said about three-quarters of Calian’s additional projected revenues are expected to come from Allphase and Alio, with organic growth accounting for the rest.
“We saw a strong Q1, and we’re expecting that to continue throughout the year,” Houston said.
Ford told analysts that Calian, which has now acquired 10 companies in the past nine years, will continue to look for more M&A opportunities as it strives to hit its target of growing revenues five per cent a year through acquisitions and five per cent organically.
“I’d like to keep that going,” he said. “We don’t want to slow down M&A for sure, but we’re also taking our time to make sure we’re taking time to integrate the ones we’ve done.”
Calian shares ended the day up 10 cents to $44.60 in trading on the Toronto Stock Exchange.