Fleet management group DigiCore Holdings has benefited from a R150 million contract with Debis, reporting a 395% increase in headline earnings for the six months to end-December 2000.
Executive deputy chairman Nick Vlok says a 301.4% rise in revenue to R173.27 million from R43.17 million for the corresponding period of 1999 means the group is on track to meet its R300 million forecast for the full year.
Operating profit before depreciation was boosted to R27.66 million (1999: R7.24 million), while headline earnings rose to R22.94 million (R4.64 million). Headline earnings per share increased to 6.2c (1.6c).
Vlok says the initial R150 million Debis order was fulfilled by the end of February.
"With phase two of the five-year contract now in progress, future revenues will be derived from de-installation, re-installation and maintenance of C-Track units in the Debis fleet outsourced by Telkom."
He adds that C-Track has now become the de facto standard for all future fleet management systems implemented in co-operation with Debis Fleet Management, as well as in association with several other equivalent industry players.
"Despite the South African transport industry remaining under pressure due to lower consumer demand, fuel increases, and persistent overcapacity aggravated by low rate structures, DigiCore Fleet Management sustained its market share without sacrificing sales margins with revenue gains marginally higher, even when excluding the Debis contract."
DigiCore Australia has not performed to expectation and Vlok says management has decided to review the business strategy in that region after about three years and an investment of R2.8 million.
However, DigiCore Pakistan, which has secured a deal with Honda, contributed 35% to global exports, with growth in sales orders rising 275% over the six months.
The business model established successfully in the Benelux region over the past 18 months is being replicated throughout Europe, and Vlok expects strong growth in that market.
Vlok adds that the group is identifying other strategic partners in the vehicle manufacturing, financing and insurance industries. He also expects business opportunities in SA as a result of the accelerated privatisation of government assets.
"Based on the successful project management and implementation programme of the Debis tender, DigiCore is well positioned to capitalise on global opportunities that will present themselves over the next 12 months."
The group`s share was trading 2c or 5% down at 38c in early morning trade on the JSE.
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