Recall Annual Profit Falls on FX Swings

   By Ross Kelly 
 

SYDNEY--Recall Ltd. (REC.AU), the document management company spun out of Brambles Ltd. (BXB.AU) in December, posted a small fall in annual profit because of foreign exchange losses and lower earnings at a document destruction unit.

Recall's net profit for the year through June fell 3% to 42 million Australian dollars (US$39 million). Pro-forma underlying earnings, which assumes the company was in existence for a full reporting period, fell 1.7% to US$133.1 million after accounting for currency swings. On a constant currency basis, those earnings rose 3.7%.

A 6.7% increase in revenue was underpinned by strong performances at the company's document management and data protection units, and aided by acquisitions including Recall Singapore. The rise was offset by a poorer performance from the destruction services business, which was the subject of a strategic review. Recall said it plans to sell its German document destruction business.

The earnings result was broadly in line with the company's guidance provided in February that revenue growth would approach the mid single-digits, while underlying earnings growth on a constant currency basis would be lower than revenue growth.

The company forecast revenue growth in the current financial year "approaching the high single digits", with the rate of operating earnings growth again to be lower than for revenue.

Write to Ross Kelly at [e-mail]

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