Sultan honest about Agility troubles

TAREK Sultan (right), Agility’s chairman, has admitted that the company’s difficulties in 2010 will make recovery “challenging”, but he is still hopeful for the future.

In 2010, on top of the global recession and the closing of several large military contracts, Agility also had a lawsuit brought against it by the US Army over alleged acts of fraud.

“The legal proceedings by the US government, which led to the suspension on winning new government business, has had a deep impact on our Defense & Government Services (DGS) business,” says Sultan. (The DGS business historically contributed 25-35 per cent of Agility’s annual revenue.)

However, Sultan insists that surviving such a massive drop in revenues is still possible. “Agility’s overall vision and strategy have not changed in the face of these challenges. However, we must adjust timelines and tactics. Realistically, 2010 will be a year of transition for the company. Agility is likely to face declining profitability over the course of the next four quarters, as a result of major US government contracts winding down in Iraq, recovery from the global recession, and the financial impact of the legal dispute with the US government.

“In order to reverse the decline in profitability, we will aim to grow revenue organically, accelerate realisation of return on investment, reduce costs prudently, and maximise yields on core operating assets.”

With regards the ongoing court case, Sultan commented: “If the company is able to settle the dispute, then DGS will focus on aggressively rebuilding its business, reinvigorating business development and customer outreach. If we cannot reach a mutually agreeable settlement, then we would need to assess all strategic options for the DGS business. For now, the situation is fluid and no decision has been made, but we have contingency plans in place.”

Overall Sultan was decisive: “Although we are facing challenges, I see them as a catalyst for change. I believe that with a commitment to discipline, Agility will emerge stronger, more flexible, and more competitive.”