Restructured electronics and IT company Control Instruments (CI) has turned its operating margins around. The company has also hinted at a separate JSE listing for IT division Matrix.
After the restructuring undertaken in 1998, CI reported solid earnings of 14.9c a share in the year ending 31 December 1999. This represents a 31% annualised growth over the 11.4c earned in the preceding 12 months to 31 December 1998.
Improved trading margins saw turnover of R145.4 million transformed into operating profit of R5.6 million, which compares favourably with the preceding 18 month period when the pre-restructured CI showed turnover of R288.7 million and an operating loss of R7 million.
CI`s IT interests are made up of Internet and GSM systems. Matrix was the first of the CI IT investments and has gone on to acquire 112 000 shares in Cellpoint which owns international rights to certain GSM technologies, and is in the process of listing on Nasdaq.
DataPro, CI`s Internet division, is a business-to-business solutions provider and Internet service provider focused exclusively on small and medium enterprises.
CI`s IT interests contributed R10.4 million to turnover - a 42% increase over the preceding 12 months. The IT interests reached breakeven with a small profit of R78 000 compared to a R4 million loss in 1998.
"Our IT and Internet businesses are all focused and present realistic chances of developing revenue streams and the associated profitability. They are all Internet businesses driven by business people who understand their businesses and are using the Internet as a tool," says Richard Friedman, group MD.
Friedman also hinted at listing Matrix on the JSE since it had shown strong profitability within the group. "We don`t want to over-hype the possible separate listing of Matrix and would rather under-promise and over-deliver."
Looking ahead, Friedman says CI`s balance sheet remains strong with net cash reserves of R16.5 million. "This cash and the additional facilities that we have in place should be sufficient to enable the funding of planned future growth and strategic acquisitions."
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