Technology, education and staffing group Advtech has seen a drop in profits for the year to December, but remains confident after restructuring and rationalisation. The company also refuted claims that its MD is resigning.
Advtech has grown its headline earnings to R36 million (R32 million) for the year to December, the first year to reflect figures for the restructured group.
Turnover for the year amounted to R554 million, up from the 1999 figure of R206.5 million. Operating profit also grew from R39.4 million to R 48.5 million, however, after-tax profit dropped from R30 million to R19 million.
Headline earnings crossed the line at 9.14c, also down from the 11.6c reported in 1999.
Accounting changes, goodwill write-offs and deferred tax reflection contributed to the drop in profits, but the group remains positive about future prospects.
The group says it has experienced a varied performance from its divisions. While the education division performed to budget, the resourcing division experienced a less than satisfactory year.
The poor performance of some of Advtech`s brands has been attributed to the adverse market conditions, particularly in the IT sector.
The company`s management says the Bryan Hattingh group performed "particularly poorly and saw a 1999 profit turn into a loss for the 2000 financial year".
Bryan Hattingh, founder of the IT recruitment company, left the Advtech fold along with three other directors of Bryan Hattingh Recruitment at the end of last year, and Advtech chairman Brian Buckham says the Advtech board had decide to realign the consultancy to focus on its original core business.
The resourcing division has been restructured and some of the smaller non-profitable divisions have been closed.
Reports on a Johannesburg radio station on Tuesday, 27 March, that Advtech MD Renny Plit had resigned from the group were also laid to rest today. Buckham says Plit is committed to the group and remains in his current position.
After much wrangling, the Advtech board accepted the Calejero Consortium`s mid-February offer to acquire the company for around R300 million. This offer was subject to investigations and shareholder approval. The consortium had guaranteed a purchase price of not less than 60c per Advtech share.
Buckham says the investigations into the acquisition continue and no further news is available on this front.
Markets reacted favourably to the company`s financial results, with the Advtech share climbing 5c on intra day trading, hovering around the 46c level by 10am today.
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