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Unihold profits plunge

By Iain Scott, ITWeb group consulting editor
Johannesburg, 04 Sept 2001

Unihold saw its attributable earnings fall 58% and weighted headline earnings per share fall almost 93% in the 12 months to 30 June 2001.

The group is reporting the results on an interim basis, as it has changed its year-end to 30 September.

<B>Figures at a glance</B>

Unihold results for the 12 months to 30 June 2001
Previous year`s figures in parentheses:

Revenue: R759.42m (R692.14m)
Operating income: R26.06m (R48.86m)
Income after tax: R21.32m (R28.45m)
Attributable income: R11.25m (R27.17m)
Weighted HEPS: 2.2c (31.2c)
Cash generated from operations: R18.62m
(-R29.46m)
Cash and equivalents: -R19.44m (-R51.28m)
Current assets: R290.47m (R344.79m)
Current liabilities: R216.28m (R328.82m)
NAV per share: 180c (139c)

Group CE Gary Harlow says Unihold continued to evaluate and evolve its strategy in the period, with developments along this line including the merger of its South African IT interests with Siemens Business Solutions. Unihold owns 40% of the merged entity.

He says the earnings of the local operations were affected significantly by poor trading conditions in the South African IT and communications sectors, whereas the international operation, Pecaso, performed well above expectations.

The reported headline earnings per share reflect the impact of economic conditions in SA over the past year, as well as the rationalisation steps taken to return all the business units to profitability, he adds.

Unihold Business Solutions` results were affected by declining revenues in the second half of the year, mainly because of delays in the award of several major contracts under negotiation.

"During the period, an extensive cost rationalisation project was undertaken, with the division incurring a once-off restructuring cost of R8.6 million."

The group also disposed of Protea Data Systems to a management-led consortium in line with the intention to dispose of certain non-core businesses in the communications division.

Harlow says that having re-evaluated its strategy, Unihold has "concluded that, as a small-capitalisation player in the present market, its current strategy yields sub-optimal value to its stakeholders".

He adds that following the SBS/UBS merger, Unihold will hold material investments in two significant IT businesses (Pecaso and SBS), with a controlling interest in Taxbreak and Knowledge Objects.

"A more detailed announcement will be made shortly regarding Unihold`s future strategy," he says.

The Unihold share was trading 5c down at 140c on the JSE this morning.

Related stories:

Unihold sells division, repositions

Unihold issues profit warning, share loses 13%

Unihold sells Pecaso stake for R20m

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