JSE-listed DigiCore Holdings` attributable earnings fell 45% in the six months to end-December, partly as a result of the Y2K adjustment of installed software products accompanying the C-Track device.
DigiCore owns, among others, DigiCore Cellular, DigiCore International and VeproTech, which supplies the transport industry with service and fleet management systems.
C-Track is a mobile asset management system enabling companies to manage and control the logistics and security of mobile assets.
A revenue increase from R42.8 million to R43.2 million was impacted by the Y2K adjustment and the consolidation of the transport industry, says MD Nick Vlok.
Operating profit fell 37% to R5.8 million from R9.1 million in the same period of 1998. Attributable profit of R3.3 million compared with a previous R6.0 million.
Fully diluted earnings per share came in at 1.55c from 3.38c in the year-earlier period.
Vlok says the earnings per share figure was achieved on a 20.5% increase in the weighted average number of shares issued during the period.
"In addition to costs related to establishing the appropriate management reporting structures to deal with the growth experienced since listing, the results were also impacted by the capital investments made and expenditure incurred to roll out our products in Pakistan, Europe and Australia.
"Delays experienced in Pakistan relate to the GSM infrastructure which took longer than expected to install, as well as the upscaling of DigiCore`s Australian activities to build the necessary efficiencies in facilitating market penetration," he adds.
Vlok says Australia presents an enormous opportunity for the sale of its products, but start-up costs are high and the market is competitive. The group has appointed former DigiCore Holdings director Derek Wasson as MD of DigiCore Technologies Australia to oversee its expansion.
"Management is currently addressing the high stock and debtors` levels, a result of the difficulties experienced by our clients operating in the transport market, in terms of high interest and operational costs," says Vlok.
"This situation is currently unwinding, with an increase in collections and orders flowing through from our offshore markets."
The DigiCore share was trading unchanged at 25c on the JSE by late Wednesday morning.