Listed distributor Pinnacle Technology Holdings' purchase last year of Axiz paid off in the year to June and aided it in growing revenue 57%.
In a statement released this morning, the group said overall results were “satisfactory” although some of its trading units did not perform as expected. However, its recent purchases contributed 33% towards revenue growth of 57%, to R5 billion.
Pinnacle offers products such as Microsoft, VMWare, Citrix, Dell, Asus, Hewlett-Packard, Lenovo, Logitech, Oracle, Sun, Intel, IBM, Sharp, Samsung and LG, as well as its own Proline range of IT and audio-visual equipment.
It bought Axiz last year for R150 million, expecting it to add about R2 billion to annual revenue. In July, it increased its stake in Centrafin to 90.2%, after buying another 39.2% stake in the financial company from CGI for R11.35 million. It has spent R44 million funding Centrafin's book.
The group says organic growth of 24%, before acquisitions, can be compared with a total 12% turnover improvement last year. Pinnacle says a lower gross margin, 15% compared with 15.1% a year ago, was offset by synergies achieved as a result of the Axiz merger.
Mixed bag
AxizWorkgroup, which is the result of Pinnacle's buyout of Axiz and its merger with its WorkGroup unit, has delivered the expected result, it says. The combined entity delivered revenue of R2.5 billion, Pinnacle says.
Pinnacle Africa improved revenue 18%, to R2.24 billion, despite a stronger rand. Pinnacle says government spending is starting to pick up again and substantial deals were signed during the period.
DataNet's revenue increased 39%, to R248 million, largely after Pinnacle incorporated CentraVoice's voice and data business. However, it was still a disappointment as it only managed a “slightly better than breakeven bottom line” before CentraVoice compared with a R3.8 million profit last year.
Infrasol, in its second year of operation, has increased its turnover fourfold to R159 million, from R39 million a year ago, and net profit increased to R9.8 million from R800 000.
Pinnacle's Sharp business made an after-tax loss of R4.6 million from turnover of R12 million. Pinnacle says “continuing inroads into the market so far have been encouraging and should ensure the company will become profitable in future”.
Pinnacle declared a 23c a share dividend, up from 16c a year ago.
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