Ottawa’s Calian Group sets annual revenue record in fiscal 2019

Ford
Calian Group CEO Kevin Ford. File photo

Calian Group continues to rewrite its corporate record book with a record fourth quarter of fiscal 2019 pushing the company past the $340-million mark in full-year revenues for the first time in its history.

Calian (TSX:CGY) reported revenues of $343 million for the fiscal year ending Sept. 30, a 12 per cent increase over fiscal 2018. The Kanata-based firm capped off a 12-month span that saw it acquire two new companies by posting record revenues of $90.9 million in the fourth quarter, a 16 per cent jump over the same period a year earlier. 

The addition of new customers and service lines also boosted the company’s bottom line.

Calian booked a net profit of $20 million, or $2.55 a share, in fiscal 2019, up from $16.2 million, or $2.11 a share, a year earlier. Its net profit of $8.5 million for the three months ending Sept. 30 marked the 72nd consecutive quarter the firm finished in the black. 

The company’s EBITDA ​– which takes items such as depreciation out of the equation ​– was a record $27.1 million for the year.

Calian expects to keep gaining momentum in the year ahead, projecting revenues of between $365 million and $395 million in fiscal 2020 as well as adjusted net profit per share in the range of $2.35 to $2.65.

“We continue to believe that Calian’s diversified profitable growth engines are one of the company’s unique strengths,” chief financial officer Patrick Houston said in a conference call with analysts on Tuesday morning, noting the firm’s gross margin also rose to 21.8 per cent, up from 21 per cent in fiscal 2018.

“Our focus continues to be the introduction of products and services into new markets in order to increase our gross margins.”

In addition to reporting its year-end financial results, Calian also said it has reorganized its business lines to better reflect its services.

The company is doing away with its previous two-division structure, which consisted of a business and technology services segment headquartered in Kanata that delivered health-care, training and IT services and a Saskatoon-based systems engineering arm focused on making satellite components.

Calian will now be divided into four operating segments: advanced technologies, health, learning and information technology. 

Advanced technologies will include the former systems engineering division, along with other selected engineering and technical staff as well as employees from recently acquired agtech company IntraGrain Technologies of Regina and German satellite firm SatService, which Calian acquired in April. The remaining divisions will be based in Ottawa.

Calian officials said the new structure better reflects the company’s diverse services and markets. According to a breakdown provided in Calian’s latest financial statements, the health segment contributed the biggest portion of the company’s revenues in fiscal 2019, generating nearly $116 million. Advanced technologies was next at $110 million, followed by learning at $63 million and information technology at $54.5 million.

Revenues in all four segments rose year-over-year, Ford noted, with IT leading the way at 22 per cent growth and health services showing a 16 per cent jump.

“I call Calian a four-piston engine,” he told analysts.

With many of Calian’s key customers being public-sector organizations – in 2017, for example, Calian inked a landmark 12-year deal to provide health-care services to the Canadian military that’s expected to be worth nearly $1 billion – Ford was asked if he expects the results of October’s federal election to have an impact on the firm’s ongoing revenues.

Ottawa’s 2017 CEO of the Year noted that key portfolios such as defence and innovation, science and economic development remain under the same leadership as before, adding he considers that a positive sign for his company.

“At least initially we’re seeing stability in the sense that the ministers that were appointed in those departments are the ministers we had prior to the election,” he said. “I don’t expect there’s going to be a major shift. We are still very busy in our government segment right now.”

Calian shares were up more than 3.5 per cent to $39.10 in mid-afternoon trading on the Toronto Stock Exchange.