Melbourne IT goes beyond its domain

Melbourne IT has recorded its fifth consecutive year of double-digit growth and expects the trend to continue as the internet becomes ever more important to world commerce.

Having started as purely a domain name registrar spun off from the University of Melbourne, the company now has a market capitalisation of more than $260 million and a global business in internet-related services with offices in 18 countries and more than 600 staff.

Reporting to the company’s annual meeting yesterday, chief executive Theo Hnarakis said: “This is only the start for us. As much as domain names are important, and we are the fifth-largest registrar in the world, a lot of these new services we are introducing will continue to add incremental profit growth to the business.”

The recent launch of Advantate, a joint venture with Fairfax Digital in services for small to medium business in Australia and New Zealand, was an example of where the company wanted to go, he said.

“When we started, 99% of our revenue came from domain name registrations. Now more than 50% of overall revenue comes from IT services and last year more than 50% of revenue came from overseas. We expect that (percentage) to continue to grow,” he said, most of it from IT services.

The big development for the company had been its move into corporate brand protection and analysis, Mr Hnarakis said. “A lot of new e-commerce initiatives are rising all over the world and it is important to protect not only the identity and the brand, but also the transaction itself. Melbourne IT is positioning itself in a terrific place where we can offer new services such as digital certificates, website encryption and other services to ensure protection of the transaction.”

Chairman Robert Stewart told shareholders that the company’s revenue rose from $103.8 million in 2006 to $154.4 million in 2007 producing earnings before tax of $20.1 million, compared with $8.3 million in 2006, a rise of 141% year-on-year.

Mr Stewart said 2007 was the fifth year in a row of strong growth in revenue, profit and dividends. $12 million in debt had been paid down and a debt facility cancelled, meaning that at December 31, 2007, the end of the company’s financial year, it was debt free.

The company paid a final, fully franked, dividend of 7 a share, compared with 4.5 the previous year, a rise of 56% in shareholder return. Melbourne IT closed up 5 at $3.30.

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