Despite an overall revenue boost, DigiCore's international operations remained under pressure and recorded a loss in the six months to December.
For the first six months of the year, revenue rose by R14 million - a 3% gain - with R7.5 million of the increase related to international operations and the balance thanks to South African operations.
However, the economic climate in Europe still remains under pressure and this was evidenced by Ctrack's international unit generating a loss of EUR380 000 (R5.6 million), which was lower than last year's EUR478 000 (R7 million) loss.
DigiCore says its current focus is on improving operational efficiency and cost control across all countries and remains one of the priorities of the European management team. CEO Nick Vlok said in September DigiCore reacted too slowly to the economic slump in Europe.
Ctrack in Europe and the UK has continued to work with customers and partners in the insurance market. "In the UK, sales in this sector, while still modest, are growing gradually as the capability of Ctrack and its partners is proven."
Management is currently investigating various opportunities to ensure growth of sales and the reduction of cost, resulting in the business becoming profitable in the near future, DigiCore says.
Profit before tax increased from R14.2 million to R22.1 million, which DigiCore says shows the depreciation charge for rental units is now aligned with the revenue generated, and that management's cost-saving initiatives are effective.
Cash flow from operating activities rose 3.4%, to R58 million (2012: R56 million). DigiCore says, thanks to "the significant improvement in our cash flow during the period" it has repaid R34 million in loans and bank overdraft facilities in addition to R3.7 million to its exiting black economic empowerment partners.
The listed group says it is "satisfied with the inroads made in all spheres of our business, as reflected in the growth in profitability and cash flow generated from operations". During the past year, it established a new management team.
"From an operational perspective, services from our control room, customer care and accounts departments have improved greatly, allowing our sales and management team to focus on sales and customer interaction."
During the six months, it sold more externally-financed units and has also started sales into the dealer channel on a "dual cash upfront basis", which covers costs of manufacturing while a 36-month subscription strengthens its annuity income. "We are progressing well with key partners on this strategy."
Locally, the group has continued to invest in its Ctrack offering, which has "generated new opportunities in the motor dealership and insurance channels".
Share