DigiCore posts higher interim earnings
Vehicle tracking solutions company DigiCore Holdings on Tuesday reported an 11% increase in diluted headline earnings per share to 24.78 cents for the six months ended December.
Although turnover for the six months decreased by 7% to R288 million, the company managed to increase its operating profit margin by 2% to 27%, mainly due to higher gross profit percentages achieved on the Group’s annuity based income streams, which now constitute 40% of its total revenue opposed to 27% in the comparative period. Net profit after tax was up 6% to R56.7 million.
The DigiCore board said it was satisfied to announce a reasonable performance in most of its divisions and subsidiaries for the six months.
"Our South African businesses have performed very well, and compensates to an extent for the decline in exports. This confirms the importance of the earlier strategies adopted in geographical, market and product diversification.
"It can be seen from the performance of the United Kingdom and European subsidiaries that they were more affected by the global financial crisis than our business in South Africa. We have however seen an improvement in European sales during the first two months of the new year," the company said.
Looking ahead, the group said the board is confident that it will have an improved second half of the financial year.
"We trust that we will continue the roll out of units on existing tenders in the second half of the year which should boost our Group Services performance. We are further cautiously optimistic that additional tenders will be won.
"The fact that we own 100% of our Germany distributor and have opened our own office in France will allow us to grow these markets more rapidly in the next eighteen months," it said.
"We are also excited about our SVR business locally and internationally and intend to establish DigiCore as a global competitor in this market. New products and applications to be launched shortly also give us the confidence that we can maintain our position in the global market."
Management remains very positive that DigiCore can weather the current economic storms. Its strategy will be to cut costs without affecting longer term growth, preserve cash and seek opportunities developing due to the economic downturn in terms of new markets and possible acquisitions.
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