IT products and services provider, Volante Group Limited (ASX:VGL), promised to cut 50 staff, while announcing a hefty increase in revenue and significant underlying profit boost, as revenues from the Ipex acquisition kicked in for the 2005 financial year.

Profit after tax before amortisation of $14.1 million for the year to 30 June 2005, up from $11.5 million in 2004. However, net profit after tax and amortisation was $5.7 million, down from the 2004 figure of $7.6 million due one-off charges. Revenue was $443.0 million compared with $348.3 million for the previous year.

Of the total revenue, hardware sales contributed $221.5 million, software sales grossed $117.6 million, while services accounted for $103.9 million. According to the company, the high margin services business was a bigger contributor to profits than the low margin hardware and software businesses.

Volante group managing director, Ian Penman, described 2005 as a year of transition for the company. Penman said: "Following a detailed review of all operations, we have simplified the structure into three business units - Professional Services, Managed Services and Product Solutions. We have strengthened our management team with experienced executives directly responsible for the performance of each of these lines of business, and introduced a sales engagement model aligned with the new structure.

"We are strengthening operational and financial systems and processes to improve customer service and help increase profitability. These changes, which will lead to an overall reduction of approximately 50 in our number of employees, will benefit 2006 earnings.

"Our strategy to build Volante's services business resulted in services contributing over 50 per cent of earnings for the first time. This trend is expected to continue.

"Our principal focus is to make Volante the company which our customers want to work with, the company ICT specialists want to work for, and the company investors want to own. We intend to achieve these goals through delivering excellent service across all our lines of business, increasing investment in our employees' training and development, and continuing to contain costs while targeting profitable growth."

VGL shares closed down 2c to finish on $1.43 in a day of heavy trading.